Closed Village Starbucks could have been victim of high rents, saturation 

New York /
Apr.April 15, 2008 04:42 PM

Months after Starbucks renewed its lease on its 3,200 square foot space in Astor Place,Its Nearby Store On Eighth Street And University Place has closed, leaving nothing a cheeky note.

“Keep your chin up,” the note reads, “because we’ll be bumping into each other real soon, [heart] Starbucks.”

Some customers weren’t amused by Starbucks way of saying good bye.

“Oh God, this is disgusting,” said Robert Hieger, a computer technician who was meeting a friend at the closed cafe. “That’s the most patronizing nonsense I’ve seen in my life. If they weren’t so convenient I wouldn’t go, because they’re a disgusting company.”

The store’s closing, first reported by Racked.com, could reflect both the area’s increasing rents as well a new strategy for Starbucks as its profits shrink in the U.S.

Starbucks announced yesterday that it would eliminate 600 jobs due to higher costs, lower consumer spending and possible saturation of the U.S. market, Reuters reported. Last month, the chain announced that it would close 100 underperforming stores around the country and scale back expansion plans.

“They are being more careful about where they open and what they pay, and this area near Astor Place has increased in value,” said Robin Abrams, executive vice president at Lansco Corp. “I think Starbucks now understands that they don’t have to have sites as close as they did originally. They control the New York market, so they may not need to maintain the site at these days’ rental [rates].”    

Starbucks is not the first corporate franchise to close in the Astor Place area. Last summer, the Barnes and Nobles on Astor Place also closed, citing rising rents.

Along with high rents, the Starbucks on Eighth Street had plenty of competition from other Starbucks nearby: in addition to the Astor Place cafe, the popular NYU Starbucks on University and West Fourth Street often has lines looped around the back of the store as students charge their lattes to their meal plan. 

One neighborhood storeowner, Joshua Suzanne, lamented the high rents, but had little sympathy for the coffee chain.

“Who [the heck] would pay rent here?” Suzanne said. “Also, they blame it on the economy, but I blame it on saturation. People come into my store and say, ‘Where’s Starbucks?’ and I say, right down the block in any direction.” 


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