Simon and Starbucks settle lawsuit over Teavana closings

It's unclear if settlement will change Starbucks plan to close 77 stores at Simon properties nationwide

Teavana (Credit: Phillip Pessar/Flickr)
Teavana (Credit: Phillip Pessar/Flickr)

Shopping mall giant Simon Property Group and Starbucks Corp. have settled a lawsuit Simon filed last year, aimed at preventing Starbucks’ closure of dozens of Teavana stores in Simon-owned properties.

Starbucks announced in July that it would close all 379 Teavana stores — including 77 at Simon properties — by this spring because of poor performance partly blamed on declining foot traffic at malls, according to the Wall Street Journal. Simon sued to stop the move, and in November an Indiana judge ruled in the mall owner’s favor.

A representative for Starbucks did not say if the settlement affected the scheduled closing of the Teavana stores, but said the company “will continue to emphasize Teavana tea in new and different ways at Starbucks,” according to the Wall Street Journal. Simon did not comment.

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Simon argued the July announcement and the impending breach of the leases for the Teavana stores caused “irreparable harm” to the company. Starbucks operates nine Teavana stores at Simon-owned properties in South Florida, including at The Falls in Miami, Sawgrass Mills in Sunrise, Coral Square mall in Coral Springs, and Town Center in Boca Raton.

The suit underscored brick-and-mortar retail’s continuing decline in the face of growing online competition and shrinking foot traffic at traditional malls nationwide. In December, a judge in Washington state similarly ruled that Whole Foods had to reopen a shuttered store in a suit brought by a landlord against the grocery store operator. Whole Foods was two years into a 10-year lease that required it carry on business uninterrupted. [WSJ] — Dennis Lynch


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