Starbuck Corp. announced that it will close its San Francisco La Boulange shops as they are no longer deemed sustainable.
La Boulange’s parent company – Bay Bread LLC was purchased by Starbucks Corp. in 2012 for an investment of 100 million dollars. At the time, the purchase was addressing customer requirements for an enhanced and more diversified baked-goods menu.
Three years later, after revenue from the baked goods boosted, the food retail chain in San Francisco will be closing the doors of all 23 La Boulange locations. The decision was taken with the in-house expansion of the brand in sight.
The main offerings of the La Boulange pastry shops located in central areas of San Francisco were pastries and breakfast sandwiches which brought an overall increase of food sales by 16 percent, with the breakfast sandwiches alone accounting for 35 percent increase in sales.
According to Cliff Burrows, group president for Starbucks U.S., La Boulange pastry shops are becoming a distraction from focusing on the main brand, Starbucks.
There will be no more baked goods wrapped in pink paper bearing the La Boulange mark, yet this is because on the long run the chain is simply not sustainable. According to Mr. Burrows, the closure is not pinpointed by the underperformance of some of the La Boulange shops.
Rather, the focus needs to shift towards running one core brand, Starbucks, instead of two related ones. That is why further developments regarding baked good will be happening in-house rather than through another acquisition.
At the time of purchase of La Boulange chain, the founder of the company, Pascal Rigo took the seat of the senior vice president. In his quality as senior vice president, Mr. Rigo was responsible for creating the new recipes and training the suppliers to carefully follow them.
With the forthcoming closure of La Boulange baked goods shops, Pascal Rigo will also be leaving Starbucks Corp. Along with the closure of the 23 locations, two supplying facilities will close their doors as well.
Further plans for Starbucks Corp. include the closure of Evolution Fresh juice store located in San Francisco.
Instead, Teavana stores will be increasingly opening under the auspices of Starbucks, after the purchase of the mall tea shops was concluded in 2012.
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