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Retail

Another Defeat For Starbucks (SBUX)

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By Douglas A. McIntyre Published
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Howard Schultz, the CEO for life at Starbucks (SBUX) recently told Portfolio magazine all about his plans to turn around the company. The editors should not have bought a word of it.

In the face of a disintegrating US business, the company announced that it would close approximately 600 underperforming company-operated stores in the U.S. market. The PR spin on the news was astonishingly transparent. SBUX called it part of a "multi-faceted plan to transform the company."

The decision will cost the company on the bottom line. Pre-tax charges related to the store closings include approximately $200 million of asset write-offs to be recognized in the third quarter of fiscal 2008. A projected $120 to $140 million for lease termination costs and future lease obligations are currently expected, nearly all of which will be recognized in the fourth quarter of fiscal 2008 and the first half of fiscal 2009.

The stock, already near a 52-week low at $15.60, moved down further after hours. The Schultz show is not playing on Wall St.

Douglas A. McIntyre

Photo of Douglas A. McIntyre
About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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