07/27/2017 16:49 EDT | Updated 07/28/2017 09:18 EDT

Goodbye, Teavana: Starbucks Shuts Down Chain Over Disappointing Earnings

The shopping mall tea chain has 56 locations in Canada.

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NEW YORK — Starbucks plans to shutter all its Teavana stores as it seeks to improve its financial performance.

The company said Thursday it will close all 379 Teavana locations over the coming year. It had acquired the mall-based chain in late 2012, and said this past April that it was reviewing options for it. Starbucks CEO Kevin Johnson noted declining foot traffic at malls.

Teavana has 56 locations in Canada, including 30 in Ontario, nine in Alberta and six in British Columbia.

"We felt it was an appropriate time to take the decision and begin shutting down those stores,'' he says.

Starbucks also reported global sales growth of 4 per cent at established locations for the quarter ended July 2, fueled by higher average spending per visit. But the frequency of customer visits was flat from a year ago.

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In the U.S., sales rose 5 per cent at established locations, also driven mostly by higher spending. The Seattle-based company cited "ongoing macro pressures impacting the retail and restaurant sectors'' that have made it more cautious going into the next quarter.

Sales at established locations in its Asia unit rose just 1 per cent during the three-month period. Earlier in the day, Starbucks announced plans to acquire the remaining 50 per cent stake of its East China joint venture that it does not already own, making it the operator of all Starbucks stores in mainland China.

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It said it will sell its 50 per cent stake in its Taiwan joint venture so that the stores there are run by local operators.

For the quarter, Starbucks Corp. earned $691.6 million, or 47 cents per share. Excluding one-time items, it earned 55 cents per share, in line with Wall Street expectations. Total revenue was $5.66 billion, less than the $5.76 billion expected.

Starbucks shares rose 5 cents to $59.55 in extended trading.

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