Simon Property Group sues Starbucks over Teavana closures
Starbucks announced in July it would close all Teavana stories, including 78 at Simon properties
Simon Property Group is suing Starbucks Corp. over its plan to close its Teavana stores across the country.
Simon alleges that by closing Teavana locations in 78 of its malls, Starbucks would be breaching its lease agreements. The Indianapolis-based real estate investment trust filed the suit in Indiana last week, according to the Indianapolis Business Journal and Wall Street Journal. It’s arguing that while other retailers have shut down due to struggling financial issues, the Seattle-based coffee giant is doing just fine.
In July, Starbucks announced it would shutter all of its 379 Teavana stores by the spring of 2018. Starbucks bought the tea company for $620 million in 2012, but despite “creative merchandising and new store designs, the underperformance was likely to continue,” the company said in a third-quarter earnings report.
Simon is also alleging that the announcement caused “irreparable harm” to Simon, its shopping centers and its reputation. In South Florida, Teavana has nine locations, including The Falls in Miami, Sawgrass Mills in Sunrise, Coral Square Mall in Coral Springs, Town Center in Boca Raton and others owned by the retail REIT.
“Starbucks should not be permitted to put its stock price above its contractual obligations, the viability of Simon and its shopping centers, other retailers and consumers who count on the Teavana stores in Simon’s shopping centers and the communities served by those shopping centers,” Simon stated in the complaint. [WSJ] – Katherine Kallergis