One Berkeley Starbucks to Close in Midst of Nationwide Shutdowns
Thursday, July 24, 2008
Category: News > City > Business
As one of the trendiest brand names in America, it's no surprise that Starbucks is keeping with a current national trend. The company experienced a disappointing decrease in net earnings last quarter, leading Chief Executive Howard Schultz to announce the closure of 600 store locations, including one in Berkeley.
One of the three Berkeley Starbucks locations, on the corner of Cedar Street and Shattuck Avenue, is included on the national list of closing stores, though employees said they do not know when the closure will take place.
The store, like other locations across the country, has been deemed an "underperforming" site. The company evaluated the store's inability to generate acceptable returns in the foreseeable future, according to a statement by Starbucks.
Two Starbucks locations in Berkeley, one near the intersection of Oxford Street and Center Street and one near Shattuck Avenue and Allston Way, will remain open.
Close proximity between Starbucks locations-the two remaining Berkeley locations are within three blocks of each other-played a large role in the decision to close specific stores, and analysts believe the closures will prove profitable to the company in the long term.
Costs associated with the planned nationwide closures, including severance costs, are estimated to be $328 million to $348 million, according to Starbucks.
Employees from the former location will either be transferred to a nearby retailer, or will receive a severance based on their job title and current pay rate.
Sitting at a table outside of the Cedar and Shattuck location with a caramel macchiato in hand, North Berkeley resident and former Starbucks employee Breann Barron said she is not disappointed the store is closing, because the other two locations are on her way to class at UC Berkeley.
"It doesn't really affect me, but I feel really bad for the people losing their jobs," she said. "I know several people who are anti-Starbucks, but when a store closes, employees are at a loss."
Cristal Gallegos, a barista at the Guerilla Cafe on the same block as the closing Starbucks, agreed that many Berkeley residents are opposed to corporate businesses in the city, and said that the store's closure would not affect the business of the Guerilla Cafe.
"We draw a different crowd from the Starbucks customers, with different coffee standards," Gallegos said. "If customers want those Starbucks drinks, they can always just go to the other locations," Gallegos said.
Contact Hadas Goshen at [email protected]
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