Starbucks has asked landlords to lower its rent
It cited the "staggering economic crisis"
Starbucks has reportedly asked landlords to give the company a break on rent for at least a year as social distancing as affected its sales.
According to the Seattle Times, the coffee chain wrote a letter to landlords earlier this month reading: “Effective June 1 and for at least a period of 12 consecutive months, Starbucks will require concessions to support modified operations and adjustments to lease terms and base rent structures.”
That letter, signed by Starbucks Chief Operating Officer Roz Brewer, came just one day after Starbucks announced it would reopen 90% of its company-owned stores in the US by early June. There are almost 9,000 stores across the country - that’s more than nearly any other chain. In making the announcement, President and CEO Kevin Johnson wrote that Starbucks “will not just survive, but with adaptations and new routines, it will thrive.”
But the letter to landlords asked them to “adapt to new realities”. It said the closure of many businesses as a result of covid-19 is “a staggering economic crisis”.
Brewer wrote: “This is the worst recession since the Great Depression and far more devastating than the global financial crisis. What lays ahead is daunting but by no means insurmountable with a shared commitment and a clear path forward.”
Starbucks’ quarterly earnings fell by half from 2019, the company announced on an April 28 earnings call with investors, to $328.4 million.