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Starbucks Closes More Than Half Of China Stores Due To Coronavirus

starbucks jan29 lt

Starbucks on Tuesday said it has closed more than half of its stores in China temporarily due to the worsening coronavirus outbreak that claimed around 132 lives in the country. The coffee giant is also monitoring and modifying the operating hours of all of its stores in the region.

The closed store count would be more than 2000 as Starbucks operates almost 4,300 outlets in China, which is its largest market outside the US.

Coronavirus, first detected in the city of Wuhan in Hubei province last month, has spread to more than 30 provincial-level regions. The country reported almost 6,000 confirmed cases, and the numbers keep rising at an alarming rate.

While announcing its fourth-quarter results and fiscal 2020 outlook, the company said it cannot reasonably estimate the duration of business disruption, reduced customer traffic and related financial impact at this time, due to the dynamic nature of the circumstances.

However, the impact would hurt its International segment and consolidated results for the second quarter and fiscal 2020.

As of now, the company's fiscal year 2020 guidance is unchanged which excludes any impact of the coronavirus.

Kevin Johnson, president and CEO, said, "As events unfold, we will be transparent with all stakeholders in communicating how we are responding to these extraordinary circumstances and the implications for our near-term business results. We remain optimistic and committed to the long-term opportunity in China, building on our brand heritage and 20-year legacy of profitable growth."

Major cities in the country are being locked down due to the coronavirus outbreak, affecting business of other companies as well. Apple has closed one of its retail stores in the country; McDonald's suspended business in five cities in Hubei; and Yum China Holdings Inc temporarily closed some of its KFC and Pizza Hut stores in Wuhan.

Further, almost all companies with business in China have restricted travel to the region.

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