Judge bars Starbucks from closing 77 failing Teavana stores

NY Post ^ | 12/01/2017 | Lisa Fickenscher

[Maceman]

An Indiana judge has taken an unusual step and temporarily barred Starbucks from closing 77 failing Teavana stores in Simon Property Group malls because the real estate giant was less able to handle the financial pain.

Starbucks said in July it planned to shutter its 379-store Teavana operation — but Simon rushed to court to block 77 stores in its malls from going dark — claiming such a move by a high-profile tenant could spark other stores in its malls to close.

Starbucks, after trying to turn around its stumbling tea chain, said last August it was pulling the plug on Teavana.

It wanted to close all the stores by the end of the year.

But Indianapolis-based Simon, in an environment where hundreds of stores across the country are closing, rushed to a local court to ask Judge Heather Welch to stop the store closing.

Welch, in a 55-page order, found that the very profitable Starbucks could absorb the financial hit — estimated by Starbucks to be $15 million over five months — better than Simon could. The mall operator did not provide an estimate of how much the closings of the Teavana stores would hurt them.

[Harmless Teddy Bear]

Teavana wa a perfect example of a great product so badly priced it couldn’t make it. Their teas were delicious but 5 times the price of other quality teas.

I tried their stuff, back in the days when I had money and before they were bought by Starbucks. It was pretty good but not all that or a bag of chips. I still go to my local tea supplier who is cheaper and since they have a great turnover the tea is always fresh,

[reed13k]

I’m guessing there is something in the contract where Starbucks agreed to a certain amount of notice prior to closing and they didn’t provide appropriate notification.

I don’t think we’re getting the full story. Or it could be judicial overreach. both are plausible.

[JimRed]

If it hurts Starbucks, who cares? An overpriced progressive hangout at best. But in principle, I agree that this judge is out of order.

[Ciaphas Cain]

In related news Starbucks has just unveiled it's latest flavor:

Rearden Mocha.

[moovova]

Just fire all store employees except one in each store..the one needed to open the doors at mall opening time...and then lockup at night when the mall closes. He/she can make a few teas over the course of the day, if they can find the time.

“Smith? Smith? Double half-caf iced darjeeling with lemon. Your order is ready, sir. Sorry it took me 45 minutes to make your tea.”

[cicero2k]

We don’t know the lease specifics, nor must we.

If Starbucks is in breach, they will settle/pay per the agreement. If there is still dispute, then Simon has to take this up in civil court and probably arbitrate.

I’m sure Starbucks went into this with good legal advice and counsel is surprised by this judge.

[b4me]

The judge trying to force starbucks to help support the failing mall by staying open when the starbucks store is not doing well? right, that’ll work well.

[Hiryusan]

Venezuela anyone?

[relictele]

Simon has:
1) Failed repeatedly to deal with crime and thuggery in and around its properties.

2) Chased off quality merchants

3) Encouraged, accepted and promoted sellers of cheap Chinese junk in an effort to keep spaces occupied, however temporarily

4) Raised rents regardless of economic climate

5) Failed (or refused) to pay contractors

6) Allowed kiosks to proliferate selling more junk and staffed by annoying third world barkers stepping into your walking path and interrupting your conversations or merely your train of thought

In short, Simon has some brass neck making demands of one of its tenants to say nothing of claims of being damaged financially when they are in the process of committing business suicide.

[Chode]

63 posts and no Directive 10-289 yet...

Point Two. All industrial, commercial, manufacturing and business establishments of any nature whatsoever shall henceforth remain in operation, and the owners of such establishments shall not quit nor leave nor retire, nor close, sell or transfer their business, under penalty of the nationalization of their establishment and of any and all of their property.

Point One. All workers, wage earners and employees of any kind whatsoever shall henceforth be attached to their jobs and shall not leave nor be dismissed nor change employment, under penalty of a term in jail. The penalty shall be determined by the Unification Board, such Board to be appointed by the Bureau of Economic Planning and National Resources. All persons reaching the age of twenty-one shall report to the Unification Board, which shall assign them to where, in its opinion, their services will best serve the interests of the nation.

Point Two. All industrial, commercial, manufacturing and business establishments of any nature whatsoever shall henceforth remain in operation, and the owners of such establishments shall not quit nor leave nor retire, nor close, sell or transfer their business, under penalty of the nationalization of their establishment and of any and all of their property.

Point Three. All patents and copyrights, pertaining to any devices, inventions, formulas, processes and works of any nature whatsoever, shall be turned over to the nation as a patriotic emergency gift by means of Gift Certificates to be signed voluntarily by the owners of all such patents and copyrights. The Unification Board shall then license the use of such patents and copyrights to all applicants, equally and without discrimination, for the purpose of eliminating monopolistic practices, discarding obsolete products and making the best available to the whole nation. No trademarks, brand names or copyrighted titles shall be used. Every formerly patented product shall be known by a new name and sold by all manufacturers under the same name, such name to be selected by the Unification Board. All private trademarks and brand names are hereby abolished.

Point Four. No new devices, inventions, products, or goods of any nature whatsoever, not now on the market, shall be produced, invented, manufactured or sold after the date of this directive. The Office of Patents and Copyrights is hereby suspended.

Point Five. Every establishment, concern, corporation or person engaged in production of any nature whatsoever shall henceforth produce the same amount of goods per year as it, they or he produced during the Basic Year, no more and no less. The year to be known as the Basic or Yardstick Year is to be the year ending on the date of this directive. Over or under production shall be fined, such fines to be determined by the Unification Board.

Point Six. Every person of any age, sex, class or income, shall henceforth spend the same amount of money on the purchase of goods per year as he or she spent during the Basic Year, no more and no less. Over or under purchasing shall be fined, such fines to be determined by the Unification Board.

Point Seven. All wages, prices, salaries, dividends, profits, interest rates and forms of income of any nature whatsoever, shall be frozen at their present figures, as of the date of this directive.

Point Eight. All cases arising from and rules not specifically provided for in this directive, shall be settled and determined by the Unification Board, whose decisions will be fina

[Rebelbase]

“Starbucks has excellent coffee”

Seriously?

[truth_seeker]

WTF is a judge doing, deciding which business entity can handle losses best ??

[KC_for_Freedom]

Yeah, like I signed a rental lease but wanted to move. I still had to make the payments, but I did not have to live there until the lease was up. Same idea here, the lease payments need to be made and shame on Starbucks for not providing escape clauses — or do they have them? I want to read the lease.

[KC_for_Freedom]

Yeah, like I signed a rental lease but wanted to move. I still had to make the payments, but I did not have to live there until the lease was up. Same idea here, the lease payments need to be made and shame on Starbucks for not providing escape clauses — or do they have them? I want to read the lease.

[Publius]

From Directive 10-289:

Point Two. All industrial, commercial, manufacturing and business establishments of any nature whatsoever shall henceforth remain in operation, and the owners of such establishments shall not quit nor leave nor retire, nor close, sell or transfer their business, under penalty of the nationalization of their establishment and of any and all of their property.

[Sequoyah101]

This is absolutely unbelievable. How can any judge possibly get away with this in the US?

I’ve said that if we are lucky Trump will shape much of the judiciary for most of the rest of my life and I hope it is good and that it sticks. This out of control run amok mess of the last 25 and certainly the last 8 years has turned the country upside down.

[dfwgator]

I was looking for that. First thing that came to mind.

[Rebelbase]

“Let only one stay open with the two employees during the day for four hours. The rest of them, totally bare and empty.”

Starbucks can bail on the lease but they’ll have to pay an average of the same monthlies to the lessor which is typically a set rate and a percentage of the gross take for what ever time is left on the lease. And there may also be penalty fees for breaking the lease.

Reducing hours violates the lease also.

[PapaBear3625]

Nah, I can see it. Any biz that thinks it can make a national tea franchise work in a coffee country deserves to be punished.

Plus regular Starbucks already served tea, so what was the point?

[morphing libertarian]

They usually have the option to go ahead and close and payoff the rest of the lease.