Wow. With this judge’s ruling, we have achieved one small step for Simon Property Group malls… and one giant step for Socialism.
Think that is a bit extreme? I’m not sure what else you would call it.
Here are the facts–let me know your thoughts:
This last summer, Starbucks decided to close their 77 failing Teavana stores across the nation.
Why? Well, because, it’s tea. Oolong Green tea with notes of hibiscus and Tumeric won’t get you through a Monday.
But 4 shots of expresso and foamy milk will…until noon. Anyways, I digress.
So, like anyone doing business in a free-market society, Starbucks believed they could simply shut down their stores. Cut their losses…and continue to pump caffeinated deliciousness in Americans.
According to an Indiana judge, they’re not allowed to do that.
Why? Because Simon Property Group malls will not be able to handle the financial blow. But Starbucks can.
Yes, this is real life. America, 2017.
According to The New York Post:
Starbucks, after trying to turn around its stumbling tea chain, said last August it was pulling the plug on Teavana.
It wanted to close all the stores by the end of the year.
But Indianapolis-based Simon, in an environment where hundreds of stores across the country are closing, rushed to a local court to ask Judge Heather Welch to stop the store closing.
Welch, in a 55-page order, found that the very profitable Starbucks could absorb the financial hit — estimated by Starbucks to be $15 million over five months — better than Simon could. The mall operator did not provide an estimate of how much the closings of the Teavana stores would hurt them.
The case is being closely watched by retailers and landlords alike amid a retail meltdown that has resulted in a record number of bankruptcies this year.
The retail failures have left landlords scrambling to find new tenants and retailers in the difficult position of breaking their leases.
Still, it is rare that a judge orders a retailer to keep stores open, retail experts said.
How can a judge rule in this way?
Shouldn’t you be basing your decision on the law and not on profit margins?
Just because Starbucks could potentially take the hit doesn’t mean they should.
[I would assume this is one of the reasons they became so successful…]
Telling a Starbucks they must maintain failing stores because they can and it would “hurt” landlords is like forcing someone to stay with their boyfriend because, if they break up, it will make them feel bad.
Maybe, cashiers at the grocery store will start demanding those in the check-out line wearing Rolex watchings and driving luxury cars should pay for everyone else’s groceries…because, after all, it is easier for them to pay.
That is essentially what is going on here.
Starbucks has every right to close failing stores. This is their property and if they have to pay a fee for cutting contract–fine. But we can’t start favoring the little guy just because he is the little guy.
What are your thoughts? Does this judge need some Starbucks coffee to wake up?!