Coffeehouse Chain Closes Five Stores in Snohomish County
Five coffeehouse locations in Snohomish County have recently ceased operations. These closures are part of a broader strategy to shut down stores that are not profitable or fail to provide a positive customer experience.
Last week saw the termination of two shops in Lynnwood and one apiece in Edmonds, Mill Creek, and Bothell.
Store Closures Amid Declining Sales
The decision to close these stores is happening at a time when the coffeehouse chain's top executive is striving to turn around falling sales. Sales in stores that have been operating for more than 13 months in the U.S. and Canada have been dropping for six consecutive financial quarters. Sales in the most recent quarter fell by 2% from the preceding one.
Over the same period, the operating income for North America stood at $918.7 million, marking a 36% decrease from the previous quarter.
Details of the Closed Locations
The Lynnwood stores that have been closed include a drive-thru-only location on Highway 99 and another one located in a supermarket shopping center on 164th Street SW. The Edmonds closure was a store on Highway 99, while the ones in Mill Creek and Bothell were situated at Main Street in Mill Creek Town Center and Maltby Road, respectively.
The Edmonds store allowed only dine-in or take-out options, while the Lynnwood store in the supermarket shopping center, along with the ones in Mill Valley and Bothell, offered full services, including a drive-thru.
No comments were provided when asked about the closures. However, it was noted that the closed stores have been removed from the online store locator, and phone calls to these locations went unanswered.
Remaining Locations in Snohomish County
Despite these recent closures, the coffeehouse chain still operates multiple locations in Snohomish County. Lynnwood, Edmonds, and Bothell each have five stores remaining, including some in hospitals and supermarkets. However, only one standalone store remains in Mill Creek, with the other two located inside supermarkets.
A Broader Strategy to Improve Financial Performance
The coffeehouse chain's top executive revealed in a letter to employees that a review had been conducted, resulting in a decision to reduce the number of North American stores by roughly 1%. The executive explained that stores that can't provide the right physical environment or show a path to financial success are the ones being closed.
Despite this reduction, the coffeehouse chain still plans to maintain around 18,300 company-operated and licensed stores in the U.S. and Canada by the end of fiscal year 2025. This number is slightly lower than the 18,424 stores reported in North America in October 2024.
Signs of the coffeehouse chain have been rapidly removed from the closed locations. Outdoor tables have been taken away, and windows have been covered. However, a small sign still visible in the Edmonds location bids a warm goodbye to customers.
Future Plans for the Coffeehouse Chain
In the same letter to employees, the executive assured that the company will try to relocate as many employees as possible to other stores. He added that the company will continue to grow, with new locations planned for fiscal year 2026. Although no specifics were provided, he also mentioned plans to upgrade over 1,000 locations in the next year, introducing a more inviting and layered design.
According to a document filed with federal security regulators, the cost of these store closures and employee reductions will amount to $1 billion. This includes $450 million for lease terminations, $400 million for disposing of store assets, and $150 million for severance costs for employees, including 900 non-retail employees that will be let go.
