Judge Says Starbucks Cannot Close Many Teavana Stores

Starbucks Corp. (NASDAQ: SBUX) told its investors as it released its fourth-quarter results that it did not want to be in the tea store business any more. Management said it had decided to close its 379 Teavana tea stores. That plan has been partially blocked as a judge sided with a real estate company that owns locations that house some of the locations. Perhaps mall owners have a tiny hope they won’t be entirely crippled by current retail trends.

According to The New York Post:

An Indiana judge has temporarily barred Starbucks from closing 77 failing Teavana stores in Simon Property Group malls because the real estate giant was less able to handle the financial pain.

The judge estimated the cost at $15 million over five months. Simon is a massive real estate company, so the sum would hardly be crippling.

The battle goes to the heart of what the death of brick-and-mortar retailing has done to mall owners. Earlier this year, Credit Suisse forecast that as many has 25% of America’s malls will be closed in five years. Some mall operators will go into Chapter 11 because of this, although that is not part of the Credit Suisse analysis. The investment bank blamed the trend on larger retailers like Macy’s and Sears Holdings, owner of Sears and K-Mart, and not on Starbucks, which in general is adding locations both inside and outside malls.

Whether or not Starbucks is a prime culprit in mall troubles, the judge may have set a precedent in the favor of mall owners. At least the owners better hope so.

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