Starbucks is undertaking major restructuring efforts to address its struggling business, including closing approximately 1% of its North American locations, or several hundred stores. The closures are due to various reasons, including underperformance and inability to meet customer expectations. These initiatives, led by CEO Brian Niccol, are expected to cost $1 billion and will be followed by a second round of corporate layoffs. Simultaneously, Starbucks plans to remodel over 1,000 locations and implement menu and branding changes to revitalize the chain after Niccol’s first year.
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Claire’s, a well-known mall retailer with 2,750 stores globally, has filed for voluntary Chapter 11 bankruptcy proceedings to explore strategic options for its survival. The company previously underwent bankruptcy in 2018 and cited macroeconomic factors, including consumer spending and the shift from brick-and-mortar retail, as contributors to the decision. Currently, 18 U.S. locations are scheduled to close, with more potentially added as the company seeks to terminate leases. CEO Chris Cramer emphasized that the company is actively seeking partnerships while reviewing strategic alternatives.
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Facing another bankruptcy filing, Rite Aid will close or sell all 1,245 of its stores within the next few months. The company plans to sell assets, including prescription files and inventory, while ceasing new inventory purchases, leading to increasingly bare shelves. Although prescriptions and other services will remain available until closure, Rite Aid will soon discontinue rewards points, gift cards, returns, and exchanges. The transfer of prescription files to other pharmacies is underway, but customers may experience challenges finding nearby alternatives, particularly in rural areas.
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John Q. Hosedrinker