Starbucks closing 600 stores

SEATTLE, July 2 (UPI) -- Starbucks Corp. executives woke up and smelled the coffee, announcing they will close 600 U.S. outlets in response to sagging consumer spending.

The store closings the Seattle company announced Tuesday, which affects about 12,000 workers, or 7 percent of the gourmet coffee chain's global workforce, are to begin at the end of this month and be completed by March 2009, the Chicago Tribune reported.

"We believe absolutely we're seeing a major impact from the economy," Chief Financial Officer Pete Bocian said in a conference call.

Bocian also said the company recognized it was suffering from market saturation and cannibalized sales, the newspaper said.

The cuts will leave Starbucks with about 6,600 company-owned stores in the United States. Starbucks is planning to open 200 new locations in fiscal 2009, down from an original plan of 250.

Starbucks will take on charges between $328 million and $348 million for the closings.

The company's stock closed down 12 cents at $15.62 per share Tuesday, but bounced more than 4 percent in after-hours trading.