SEATTLE — Three years after taking ownership of the La Boulange Bakery brand, Starbucks is closing these 23 cafés. All the bakeries are in California, mainly in the San Francisco area.
The coffee retailer acquired La Boulange in 2012 as part of its $100 million, all-cash transaction with Next World Group, the majority investor in the bakery business, for Bay Bread LLC and its La Boulange Bakery brand, as CSNews Online previously reported.
"As Starbucks stays steadfast in its commitment to achieve long-term growth targets enterprise-wide, it is with careful consideration the company shares the difficult decision to close all 23 La Boulange retail (bakery cafés) locations, as well as the two manufacturing facilities that serve those locations, by the end of September 2015," the company said in a release.
As a standard course of business, the retailer continually evaluates all components of its business to confirm they are aligned with key priorities and strategies for growth, which includes the continued analysis of the store portfolio.
"Based on our ongoing evaluations, Starbucks has determined La Boulange stores are not sustainable for the company's long-term growth," it explained. "The La Boulange brand will continue to play a significant role in the future of Starbucks food in stores, and the company looks forward to serving delicious La Boulange food at its Starbucks retail locations in San Francisco and across the [United States] and Canada."
The company stressed that food is a key element of Starbucks growth strategy to create new occasions to visit stores, and the company has seen tremendous response to these efforts since the acquisition of La Boulange.
In the second quarter, food delivered growth of 16 percent year-over-year and contributed two points to the comparable growth with every daypart, platform and region contributing to the increase, according to Starbucks.
In addition, sales of Starbucks new breakfast sandwiches have contributed a 35 percent year-over-year growth in the breakfast platform. The company's lunch platform delivered double-digit year-over-year gains.
The Evolution Fresh retail location in San Francisco will also close, according to Starbucks.
"Starbucks goals to grow its food business and deliver an incremental $2 billion in the next five years in the U.S. are unchanged. Starbucks will continue to deepen its commitment to customers' food experience in stores, ensuring it surpasses their expectations, just as the company has done with coffee and beverages," the company said.
Seattle-based Starbucks has more than 21,000 stores internationally.