Retail News Blog

In a recent article by Bloomberg titled ‘Starbucks Pushing Landlords for 25% Cut in Cafe Rents‘ Starbucks is still trying to cut operating costs. Their business model is changing and they no longer can sustain paying outrageously high rents and still turn a healthy profit. When their profits dipped down 69%, they began laying as many as 6,700 people off and closing 300 stores. Now they are looking to reduce rents by as much as 25% in some of their retail stores. This doesn’t include their some 4,000 stores that are located in airports and grocery stores. Modifying lease rates is a whole lot cheaper than simply defaulting on the space, like they have done in some cases. Landlords should be willing  to work with their tenants to keep their vacancy low. 

Read more of what Bloomberg had to say here