For weeks, there have been various lawsuits filed against Starbucks by landlords. Two of the reasons:
– Not paying rent in time since it announced the closing of 600 stores
– Backing out of a leases by Refusing to move in to newly built stores
Starbucks has denied many of the allegations but it recently settled one with a
builder named Chris Abele.
“Starbucks’ attitude is particularly harsh on developers that build custom buildings or engaged in custom renovations for them,” – Michael Steinberg, in his blog, Starbucks Stops Paying the Rent.
Also, a real estate lawyer, Greg Weston, made a comment on his blog regarding Starbucks relationship with landlords that “If you have a real estate contract dispute, DO NOT assume the other party is going to work things out with you in a fair matter. Especially if the other party is a big corporation like Starbucks or DR Horton.”
Regardless of all the accusations against it, “We’re not doing anything out of the norm of any other company that would seek to restructure its real-estate portfolio,” says Michael Malanga, Starbucks’s senior vice president, U.S. store development. He also emphasized that “Our No. 1 objective is to maximize shareholder value.”
Meanwhile, since it announced the closing of 600 stores in July, its stock has continued to go down, presently selling at $9.68 per share. It was $17 in July. – Yahoo finance.
“Many investors believe Starbucks’ solid margins are a thing of the past,” said Dave Mock, in his article 3 Reasons to Sell Starbucks Now.
Recently the store said it might close more than 600 stores.
The battles in court continue, not just with landlords/builders, but with other corporations like T-Mobile who says Starbucks disregards an exclusive agreement.
(Image Courtesy Google)