August 29, 2017

Simon Property Group Sues Starbucks Over Teavana Closure Plans

Article origination IPBS-RJC
A redesigned, Starbucks-owned Teavana at a Westfield mall in Seattle. - Courtesy Starbucks

A redesigned, Starbucks-owned Teavana at a Westfield mall in Seattle.

Courtesy Starbucks

Indianapolis-based shopping mall developer Simon Property Group is suing Starbucks over the coffee chain’s plans to close Teavana stores in malls nationwide.

The lawsuit argues Starbucks doesn’t have grounds to break its leases on 78 Teavana stores at Simon-owned malls, including five stores in Indiana.

Four years after buying the mostly mall-based tea brand, Starbucks said in July it would close down its 379 Teavana stores.

Most of the stores in Simon malls have years left on their leases, according to the lawsuit filed Aug. 21 in Marion County Superior Court.

“A shopping center is not merely a random collection of stores,” lawyers for Simon write in their complaint. “Rather, it is a co-dependent ecosystem of tenants with a complex system of governance that ensures its wellbeing.”

That’s why, the suit argues, Starbucks shouldn’t be able to leave its lease agreements early.

Unlike other retailers that have pulled out of Simon malls in recent years, the suit says, Starbucks hasn’t claimed it needs to cut its Teavana leases short in order to avoid bankruptcy.

“Rather, the decision is solely an effort to enrich Starbucks’ profits by shirking its contractual obligations at the expense of Simon’s Shopping Centers and the dozens of communities they serve and support,” the suit says.

The suit asks the court to prevent the stores from closing prematurely.

A Simon spokesman wouldn’t comment on any other damages they might seek.

A Starbucks spokesperson says in an email, “We are responding to the lawsuit and are working to resolve this dispute.” 

This post has been updated to include a comment from Starbucks. 

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