Starbucks barred from closing Teavana stores in Simon Malls
A mall owner has won an unusual victory over Starbucks Corp.
In August, Simon Property Group filed a breach of covenant suit against Starbucks for attempting to close 77 Teavana stores in Simon malls. At the time, one legal expert said Simon was drawing a line in the sand.
The bold move paid off for the premium mall owner when an Indiana judge temporarily barred Starbucks from executing the store closings. In a 55-page order, Judge Heather Welch opined that Starbucks was better positioned to sustain the $15 million hit for five months’ rent than Simon was.
“We are disappointed in the judge’s ruling and will continue to focus on finding a resolution,” Starbucks communicated in a statement.
Attorney Dana Kreis Glencer, a leasing specialist at the firm of Dawda Mann in Detroit, told Chain Store Age that Simon’s suit was filed on solid ground.
“Simon may be looking for a settlement, or they may be looking to create some good case law: ‘You violated your covenant to operate and you have to operate,’” she said.
In July, Starbucks announced it planned to close all 379 Teavana stores in the coming year.
While I understand the Simon Corporation not wanting to lose out on a revenue stream from the Teavana stores, if their parent corporate (Starbucks) has made a strategic decision to close them, it is not for Simon to decide, or any mall real estate owner. What if (God forbid) Starbucks had gone bankrupt, and closed all locations everywhere, what would Simon do then, take them to court also to get their revenue? Ridiculous, and a sad sign of the times.
Roots in store expansion move
Canadian apparel retailer Roots Corp. is looking to increase its brick-and-mortar presence outside of its home country.
Roots wants to open 10 to 14 stores in the United States by the end of fiscal 2019, reported the Calgary Herald, and already has four leases signed, including sites in Boston and Washington, D.C. The retailer currently has 120 stores in Canada and four in the United States. It also operates stores in Taiwan and China with local partners.
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