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Starbucks Retreats

Five Connecticut stores will close

By Daniel D'Ambrosio

July 24, 2008

Bowing to pressure from concerned coffee drinkers, Starbucks abandoned its plan to slowly leak the locations of the 600 stores it's closing over the next eight months, and instead spilled the beans last week. It was confirmation that the expansion-happy chain had finally run into the limits of growth—especially in a recession.

The hit list reveals that five Connecticut Starbucks will be shuttered, including Hartford's 682 Wethersfield Ave., which had just opened in September 2007, sharing a shopping center with a CVS pharmacy. In fact, the Hartford area was hit particularly hard: Out of the barista business will be 137 Prospect Hill Road in East Windsor; 301 Evergreen Way in South Windsor; and 209 Ella Grasso Turnpike in Windsor Locks. Only one location (another new store at 1201 Kings Highway in Fairfield) was outside the region.

Starbucks has not revealed the actual closing date for the Hartford store, and if manager Danielle Petrovich knows, she isn't talking. She says she can't discuss the closure in any way.

The trickle-down disclosure plan now stands in ruins. Starbucks had said it was going to announce the closures once every 30 days between now and mid-2009, when retrenchment operations will be complete. The company posted the first 50 closings, which didn't include any Connecticut stores, on July 11. But management could not keep the lid on its plan.

The problem is that all 600 doomed stores know who they are, and the news leaked. Starbucks says that soon after the July 11 posting, these outlets began getting "a ton" of inquiries from people who heard from friends, or even reporters, that their favorite stores were marked for closure.

In the spirit of "transparency," says the company, the entire list was posted July 17. Starbucks says it will continue to update its Web site with specific closure dates as those dates are communicated to their "partners," also known as employees. The Wall Street Journal reported on Monday that some 12,000 partners will be losing their jobs as a result of the closures.

All the Connecticut Starbucks marked for closure opened only recently, within the past several years, and all were under-performing, according to the company. There will still be about 60 Starbucks in the state.

The closures mark a significant reversal of fortunes for the company that for a long time seemed to be opening stores on every corner. Starbucks admitted the closing stores were "not necessarily the best locations," and that customers simply were not walking through the doors.

Despite a dramatic drop in its NASDAQ stock price—from $28 a share a year ago to $14 now, proving that coffee ardor may have cooled—Starbucks still insists it will open 200 new stores within the next fiscal year. It says it will target better locations where customers have been clamoring for a Starbucks of their very own.