After purchasing the pastry shop La Boulange in 2012, Starbucks has decided to close 23 of its stores by September 2015. The San Francisco bakery is famous for their French-inspired décor, artisanal pastries and delicious foods.
Starbucks believes that the stores are no longer offering significant contributions to the company. The global coffee chain is convinced that La Boulange was not sustainable for the company's long-term development and growth.
In the next three months, 23 locations of La Boulange including two manufacturing facilities will be shut down. The largest coffee chain in the world seems eager to maintain the number one spot and finding ways to preserve its reputation as being the biggest name in the food industry.
The coffee giant clarified that even if the stores will close, these will still have a significant part in the future of the company as the La Boulange's remarkable pastry products will still be sold in the new Starbucks stores.
Many believe that the step taken by the company means they will now focus on their coffee stores. Running multiple operating business is difficult. David Henkes, the Vice President of Technomic revealed the disadvantage of the investment made by Starbucks.
"While they've had some success with La Boulange-branded products, running the stores was a distraction.You see that a lot: with big brands buying smaller brands, they decide to put their energy in growing the bigger brand," said the Vice President of the restaurant research and consulting company.
In 2012, Next World Group sold La Boulange Café & Bakery to Starbucks in cash for $100 million. The partnership was intended to take delicious pastries to the coffee stores. Starbucks recognized the potential of the famous bakery and how perfect it would be to pair its great food products to their best-selling coffees.
Analyst John Russo stated that La Boulange has contributed the sales improvement of the coffee company. This means that Starbucks' investment in the company was well worth it.
