Starbucks’ shock plans to close dozens of shops across New York City are claiming dozens of high-profile places — and sparking chaos for workers, metropolis officers and landlords alike, The Post has realized.
The Seattle-based espresso giant – which laid off 900 company staffers last week in a $1 billion restructuring plan — is shuttering some 400 plus shops across the nation after reporting six consecutive quarters of gross sales declines.
Those embrace 54 espresso outlets across the metropolis’s 5 boroughs, according to the New York City Department of Consumer and Worker Protection. Among them are seemingly prime places on the Upper East Side and in Greenwich Village, according to a crowd-sourced spreadsheet being circulated to media this week.
Some 54 New York City Starbucks shops are closing. Niyi Fote/TheNEWS2 via ZUMA / SplashNews.com
Shops in the Upper West Side and the Financial District and Midtown Manhattan were likewise affected — with shuttered places in the latter including 156 W. 52nd and 871 eighth Ave.
Across the metropolis, landlords were shocked by what insiders said was an uncommon and chaotic method to the closures.
“They literally put signs in windows overnight without telling landlords and building managers,” Newmark Retail vice chairman Jeffrey Roseman instructed The Post. “There was no warning, no heads up.”
Typically, retail tenants will attain out to their landlords to negotiate potential rent concessions, Roseman said.
“There was no outreach to landlords in this case and that’s unusual for a company that’s not in bankruptcy.”
Historically, the 18,000 store chain in the US and Canada has “prided itself on having a story on every other block,” Roseman added.
A Starbucks spokesperson didn’t immediately reply to requests for remark.
“We identified coffeehouses where we’re unable to create the physical environment our customers and partners expect,” Starbucks CEO Brian Niccol — employed away from Chipotle a 12 months in the past to spearhead the company’s turnaround — said In a Sept. 25 weblog post.
Brian Niccol was employed by Starbucks a 12 months in the past to spearhead a $1 billion turnaround. Andrew Schwartz/SIPA/Shutterstock
Starbucks is likewise shuttering espresso outlets “where we don’t see a path to financial performance,” Niccol added.
Nevertheless, the company may be working afoul of native labor legal guidelines, according to a warning letter the metropolis despatched to the java giant on Tuesday. Employees at shops that are closing are entitled to be supplied jobs elsewhere in the same borough under the metropolis’s Fair Workweek Law, the letter said.
“Starbucks appears poised to violate its legal obligations to employees in New York City locations,” Department of Consumer and Worker Protection Commissioner Vilda Vera Mayuga said in the letter.
Mayuga added that by law laid-off employees get first dibs on job openings close to the shops that closed. She gave Starbucks until Friday to clarify how it will comply with New York City labor legal guidelines.
Starbucks is dealing with a excellent storm of challenges, including elevated competitors from newcomers and fast food chains like McDonald’s, which is testing a new beverage idea in 500 shops in Wisconsin and Colorado.
The Seattle-based espresso giant is closing more than 430 shops across the US and Canada. Gregory P. Mango
An aggressive labor marketing campaign by Starbucks United has resulted in 650 shops with labor contracts, of which 59 shops have been focused for closure according to the labor group.
What’s more espresso costs have skyrocketed under new tariff insurance policies.
“I see a company that is struggling with sales trends and other major pressures,” analyst Mark Kalinowski.
In 2008, during the recession Starbucks closed 600 shops, Kalinowski said.