Simon Settles Suit With Starbucks Over Teavana Closures
January 16 2018 - 2:36PM
Dow Jones News
By Esther Fung
Simon Property Group and Starbucks Corp. have reached a
settlement over a lawsuit by the mall owner that had sought to
prevent Starbucks from closing Teavana stores in its shopping
centers.
In November, an Indiana judge ordered the coffee giant to halt
from closing Teavana stores in 77 retail locations owned by Simon.
Starbucks filed an appeal against the preliminary injunction.
"We've reached an agreement with Simon to settle our dispute,"
said Sanja Gould, a spokeswoman at Starbucks. "We are thankful to
our customers who have enjoyed Teavana tea at these specialty
retail locations and will continue to emphasize Teavana tea in new
and different ways at Starbucks." She declined to comment on
potential dates for closures.
Simon didn't respond to requests for comment.
Starbucks in July said it planned to close all 379 locations of
Teavana, a chain of high-end tea shops, by the spring of 2018,
noting the stores' underperformance likely would continue, in part
because of weak foot traffic in malls.
The following month, the Indianapolis-based real-estate
investment trust filed a lawsuit to prevent Starbucks from closing
stores in its properties, saying it would suffer irreparable harm
if the coffee giant were permitted to breach its lease
obligations.
There has been an increase in bankruptcies and store closures
over the past year as retailers struggle with fast-changing
consumer tastes, competition from online merchants and an
oversupply of stores in certain regions.
More tenants are asking for lease concessions and fewer
penalties for abandoning leases, but landlords are trying to hold
the line. Many say there is ample foot traffic in malls and that
retailers should be more engaging and provide more compelling
merchandise to convert shoppers into paying customers.
Write to Esther Fung at esther.fung@wsj.com
(END) Dow Jones Newswires
January 16, 2018 14:21 ET (19:21 GMT)
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