Teavana, a go-to favourite for many tea aficionados, will be leaving the retail market, as their parent company Starbucks announced plans to close all retail locations due to low profitability.
This closure will see all 379 Teavana locations worldwide, including 56 locations in Canada, close their doors. Most locations are expected to close by spring 2018, but the first closures could be seen in Canada as early as September of this year.
Starbucks acquired Teavana at the end of 2012 for US $620 million. At the time, former Starbucks CEO Howard Shultz believed "the tea category is ripe for reinvention and rapid growth," and, "the Teavana acquisition now positions us to disrupt and lead, just as we did with espresso starting three decades ago."
Unfortunately, the former CEO's hopes for the brand's rapid growth did not come to fruition as the brand was persistently under-performing, and efforts to reverse it through creative merchandising and new store designs have done little to turn the tide. Current CEO Kevin Johnson has also noted the decrease of foot traffic in malls as one of the reasons for Teavana's struggles. Johnson does not however, see promotions such as McDonald's $1 Drink Days as a reason for the cut in Teavana and Starbucks sales, as "value players" such as McDonald's compete in a different part of the market.
The Teavana closures will affect approximately 3,300 jobs worldwide, however Starbucks has said that employees impacted by the Teavana closures will be given opportunities to apply for positions at Starbucks.
There is currently no official word regarding clearance sales or whether or not Teavana will still exist on Starbucks' menu after the closures, although many expect it to remain, citing La Boulange as an example -- Starbucks acquired the bakery chain back 2012 and incorporated some of its baked goods into their menu before finally closing all La Boulange stores in 2015.
Are you a fan of Teavana tea? Are you disappointed to hear about the store closures? Let us know in the comments!