Starbucks to Close About 250 Stores as Company Restructures North American Business After DEI Settlement
Starbucks is preparing to close approximately 250 coffeehouses across North America as the company continues a broader restructuring of its store portfolio and attempts to improve financial performance at underperforming locations.
The closures, announced September 24, represent roughly 1% of Starbucks’ more than 18,000 North American coffeehouses. The company said the affected locations are stores where it does not see a path to the customer experience or financial performance it expects.
The announcement came only days after Starbucks reached a nationwide settlement with Florida over a lawsuit challenging aspects of the company’s diversity, equity and inclusion policies. The timing has led to the two developments being discussed together, but Starbucks has not said the store closures were caused by the lawsuit or its settlement.
Starbucks Announces Approximately 250 Store Closures
Starbucks Chief Operating Officer Mike Grams said the company conducted a review of its North American coffeehouse portfolio as part of its ongoing “Back to Starbucks” strategy.
The review identified locations that were struggling to provide the experience Starbucks wants for customers and employees or that did not have what the company considered an acceptable path to financial performance.
Approximately 250 stores are scheduled to close, representing about 1% of the company’s North American locations. Most of the closures are expected to be completed by the end of Starbucks’ 2026 fiscal year.
Starbucks has not publicly released a complete list of the affected locations.
The company said employees at affected stores are being contacted and that many workers will have opportunities to transfer to other locations. Workers who cannot be placed elsewhere may receive severance.
The Closures Are Part of a Broader Turnaround
Starbucks has been restructuring its business under CEO Brian Niccol’s “Back to Starbucks” strategy, which focuses on improving the in-store experience, speeding up service and renovating existing coffeehouses.
The company says it has been accelerating its coffeehouse “uplifts,” with a goal of completing approximately 1,500 remodels.
The strategy is not simply about reducing the number of stores. Starbucks says it expects to continue opening locations even as it closes underperforming ones.
Restaurant Dive reported that Starbucks expects approximately 440 net new stores globally for fiscal 2026, below its previous projection of 600 to 650 net additions. The company also closed roughly 400 stores and eliminated about 900 corporate positions in the previous year’s restructuring.
That means the latest closures represent a portfolio shift rather than an announcement that Starbucks is abandoning expansion.
Starbucks Expects About $300 Million in Closure-Related Costs
The financial impact of the closures is expected to be significant.
According to Starbucks’ filing with the Securities and Exchange Commission, the company expects approximately $300 million in costs associated with the store closures.
About $200 million is expected to consist primarily of cash expenses related to lease-exit costs and employee separation benefits.
Another approximately $100 million is expected to come from non-cash charges associated with the disposal or impairment of coffeehouse assets.
Those expenses are part of the company’s broader restructuring effort and do not mean Starbucks expects every affected store to have been individually unprofitable.
The company said most of its North American stores remain profitable.
The DEI Lawsuit Is a Separate Development
The store-closure announcement followed a major legal settlement involving Starbucks’ workplace policies.
Florida Attorney General James Uthmeier sued Starbucks in December 2025, alleging that the company had used race- and sex-based goals, quotas or preferences in areas including hiring, promotions, compensation, mentorship, supplier selection and board composition.
Starbucks denied wrongdoing but agreed to settle the case in September 2026.
Under the agreement, Starbucks agreed to comply with Florida’s civil-rights law and not use race- or sex-based quotas or preferences in employment practices nationwide. The company also agreed to pay Florida’s Department of Legal Affairs $1 million for litigation costs and submit annual compliance certifications for four years.
The settlement therefore has implications beyond Florida because Starbucks agreed to apply the relevant changes across its operations nationwide.
However, there is no evidence in Starbucks’ announcement or SEC filing that the company closed the 250 stores because of the settlement.
The Timing Has Fueled Political Debate
The two announcements arrived within days of one another, creating an obvious point of discussion for critics of corporate DEI programs.
But the underlying events involve different issues.
The Florida case concerned workplace policies and alleged discrimination under state law. The store closures concern Starbucks’ assessment of individual coffeehouse performance, customer experience and its overall store portfolio.
Florida officials described the settlement as a rejection of race- and sex-based preferences. Starbucks, meanwhile, described its store closures as part of its business strategy.
Keeping those issues separate is important when evaluating what the latest announcement actually establishes.
Starbucks Says Its North American Business Is Improving
Despite the closures, Starbucks has pointed to signs of improvement in its North American operations.
The company said in its September 24 announcement that its North American business had returned to strong growth and that customers were seeing faster service and more consistent experiences.
Restaurant Dive reported that Starbucks’ same-store sales had recently increased 7.9% in the third quarter, compared with a 5.7% Wall Street estimate and a 6.2% increase in the previous quarter.
That combination—closing weaker locations while investing in stores that management believes have greater potential—is central to the current turnaround strategy.
What the Closures Mean for Starbucks Customers
Customers should expect the effects to vary considerably by market because Starbucks has not announced a single nationwide shutdown of stores.
Some communities will lose locations, while other stores will receive renovations or service improvements.
The company said its objective is to create coffeehouses that better match the experience it wants customers and employees to have, rather than simply maximizing the number of locations.
The 250 closures therefore represent a relatively small portion of Starbucks’ North American footprint.
A Company in the Middle of a Major Reset
Starbucks is simultaneously dealing with several major changes: store closures, coffeehouse renovations, labor issues, changing consumer habits and the aftermath of a high-profile dispute over workplace diversity policies.
The latest announcement does not establish that DEI policies caused the store closures. Instead, Starbucks has directly tied the closures to its review of store performance and its broader “Back to Starbucks” strategy.
The company’s next challenge will be demonstrating that the combination of fewer underperforming locations and greater investment in remaining stores can produce sustainable improvements.
For customers, employees and investors, the results of that strategy will likely be measured through store traffic, sales, profitability and the quality of the in-store experience over the coming quarters.
Benjamin Harris is a RapidReports front page contributor and editor,proud father of four.
