Simon Property Group Launches Lawsuit Against Starbucks
Simon Property Group, the largest REIT in the country and the biggest mall owner, has filed a lawsuit against Starbucks Corp.
The suit takes aim at Starbucks’ plan to close 78 Teavana shops in malls across the U.S., the Indianapolis Business Journal reports.
The legal action comes one month after Starbucks announced it would be shuttering all 379 Teavana stores due to slumping sales and underperformance.
Starbucks pointed to declining foot traffic in malls, which is where the majority of Teavana shops are located, as the reason for the closures, but Simon claims Starbucks is breaching its contractual obligations by doing this because at least 76 have leases that do not expire until 2027 or beyond.
Starbucks had purchased the tea empire for $620M in 2013 under the assumption the business would experience healthy expansions in the same manner as the coffee shop. At the time of its acquisition, Teavana was operating approximately 300 stores.