Starbucks Releases List Of 600 Stores To Be Shut, A Tombstone For Employees

By Douglas A. McIntyre Updated Apr 28, 5:27AM EDT · Published Jul 18, 4:04AM EDT

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Starbucks_logo_2 Starbucks (SBUX) founder and CEO Howard Schultz had his company release the list of 600 stores that coffee chain would close. It is a tombstone for the 12,000 company employees that Starbucks will push out of work and a monument to the firm’s arrogance.

At one point three years ago, the former CEO of Starbucks said it would eventually have 40,000 stores. It was a mad statement made by someone who thought his company was immune from the economy and competition. But, Starbucks kept added stores without caution.

Howard Schultz was the Starbucks chairman while most of the expansion was going on, but he certainly knew what was happening. Almost two years ago, he sent his executives a memo saying that Starbucks rapid growth was undermining the experience of the company’s customers. It appears he did nothing other than that until he sacked his CEO at the beginning of this year and returned as chief executive.

Starbucks is now trying to undo much of what it has done in the US over the last half decade. It will take a long time and cost both shareholders and employees a great deal. Schultz will still be rich and he can still blame his former underlings.

The real story of Starbucks problems is not that McDonald’s (MCD) and other companies came into the market as competitors. It is that the company sacrificed profits for growth and expansion for demand.

No one makes mistakes like a management drunk with on the feelings of their own invincibility.

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.