Judge Sides With Mall Operator, Against Starbucks

Judge Sides With Mall Operator, Against Starbucks

An Indiana judge is forbidding Starbucks (NASDAQ: SBUX) from closing many of its Teavana stores because mall operator Simon Property Group (NYSE: SPG) says the decision could hurt it.

The court filings show that Simon said that by "shirking its contractual obligations" -- bailing out before its leases were up -- Starbucks might put Simon in the position of leasing the vacant Tevana spaces to "less creditworthy tenant(s)" or tenants "who will only agree to less desirable lease terms, and/or a shorter-term lease."

Starbucks CEO Kevin Johnson announced in July that the company was closing all 379 Teavana stores because many of them "have been persistently underperforming." The coffeehouse said it took a $153 million impairment charge in its fiscal 2017 primarily as a result of the decision to close the tea houses with its "other" business segment that housed Teavana generating a minor $38 million loss for the year. The goodwill impairment charge it took related to the decision alone cost Starbucks $69 million.

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Source: Fool.com