Teavana to close stores in Baton Rouge, Metairie in worldwide shutdown

"The company concluded that despite efforts to reverse the trend through creative merchandising and new store designs, the underperformance was likely to continue", Starbucks said in a press release. Reports indicate that stores in the country grew 6-7 percent year-over-year, compared to only 3% in the U.S. Additionally, the company said that it will also be taking 100% ownership of 410 locations in Taiwan. Numerous underperforming locations were in malls, which itself are struggling nationwide-CNN cites a Credit Suisse report predicting up to 25 percent of Americans malls are expected to close within five years.

Starbucks announced Thursday that all 379 Teavana stores - which are primarily based in malls nationwide - will be closed because they have been "underperforming", CNN reported. "Starbucks' growth potential in China is unparalleled", said Johnson.

Facing tepid growth in the United States market, Starbucks has announced it will step away from its flagship tea business, and shift focus to China.

Starbucks acquired the US mall-based chain in 2012, with then-CEO Howard Schultz citing the huge potential for the tea market.

While closing its Teavana stores might seem like a drastic move, consumers shouldn't worry too much about Starbuck's overall well-being. Both deals are expected to close by early next year.

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Twitter users referenced the high price of Teavana products and the fact that not as many in the US drink tea.

The Teavana announcement came as Starbucks said global sales at its flagship chain rose 4 percent at established locations for the quarter ended July 2, fueled by higher average spending per visit.

"Innovation is key, and we continue to innovate around tea, just this month introducing Teavana Infusions, a flavor platform made from real fruits and botanicals that strengthens our lineup of healthy, less indulgent premium cold beverages".

CEO Kevin Johnson cited declining foot traffic in malls as the reason for the closure, which are the main location for Teavana stores. Revenues increased 8% to $5,661.5 million from $5,238 million.

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