Starbucks will close 250 stores. That's one percent of its North American footprint. The company calls this a turnaround. Wall Street calls it strategic optimization. I call it finally admitting that nobody needed three locations within visual range of each other.
The closures are part of the latest stage in fixing whatever's broken. Nobody knows what's broken. Sales are down because people realized seven dollars for burnt coffee in a paper cup might be insane. But you can't say that in a press release. You have to say you're rightsizing your physical presence to align with evolving consumer preferences.
Two hundred fifty stores will vanish. Employees will get reassigned or f*cked. Leases will get terminated. Real estate will go back on the market. Some other chain will move in and also fail because the problem wasn't the tenant, it was the neighborhood that can't support four coffee shops per block.
Retail traders heard "turnaround" and bought the dip. They think fewer stores means higher margins. They think this is bullish. They're doing math on their phones like they're activist investors. They're not. They're bag holders with Robinhood accounts who think corporate restructuring is a buy signal.
The technical picture hasn't changed. Support is still support. Resistance is still resistance. The 50-day moving average doesn't care that Starbucks is shutting down the location next to the other location next to the other location. Price action is price action. Everything else is just noise for people who need a narrative to feel smart about clicking buttons.
One percent gone. Ninety-nine percent to go. The turnaround continues until morale improves.
Photo by Athar Khan on Unsplash
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