Starbucks Corp. said Tuesday it will close 600 company-operated stores in the next year, up dramatically from its previous plan for 100 closures, a sign the coffee shop operator is still feeling the pain from the faltering U.S. economy.
Starbucks said in a statement that 70 percent of the stores to be closed were opened after the start of 2006. The locations set to close include ones that "were not profitable and not projected to provide acceptable returns in the foreseeable future," it said.
About 12,000 workers will be affected by the closings, which are expected to take place over the next year, according to Valerie O'Neill, a spokeswoman for the company.
O'Neill said most of the employees will be moved to nearby stores, but she did not know exactly how many jobs will be lost.
The company predicted related charges will add up to $328 million to $348 million, but said that after income tax benefits and other changes, it expects to pay about $100 million.
Starbucks also cut the number of company-operated stores it will open in fiscal 2009 in half, to fewer than 200. The company did not adjust its plan to open fewer than 400 stores in 2010 and 2011.
In May, Starbucks said its second-quarter profit sank 28 percent as U.S. consumers cut back on visits in light of rising food and gas prices.
As of the end in March, there were 16,226 Starbucks stores around the world, including 7,257 company-operated stores in the U.S.
Shares of Seattle-based Starbucks jumped $1.02, or 6.5 percent, to $16.64 in after-hours trading after losing 12 cents to close at $15.62.
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