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Starbucks' Training Shutdown Could Cost It Just $16.7 Million

Starbucks is going to close more than half its stores in the U.S. next month for an afternoon of bias training.

Starbucks' Training Shutdown Could Cost It Just $16.7 Million
A barista prepares a coffee drink at a Starbucks Corp. store in Beijing, China. (Photographer: Nelson Ching/Bloomberg)

(Bloomberg) -- Starbucks Corp., scrambling to restore trust after the arrest of two black patrons at a cafe in Philadelphia, announced Tuesday that it’s going to close more than half its stores in the U.S. next month for an afternoon of bias training.

That could set back the company, which booked $22.4 billion in revenue last year, a mere $16.7 million in lost sales, according to Bloomberg calculations.

Starbucks is shutting its so-called company-operated stores temporarily on the afternoon of May 29 -- the day after Memorial Day -- to train nearly 175,000 employees. It booked $14 billion in sales last year across its 9,412 stores in the Americas. So calculated on a per-store basis, it generated an annual $12.2 billion from the 8,222 stores closing their doors for the afternoon in the U.S. The average per day: roughly $35.5 million.

On this basis, a half-day shutdown costs them $16.7 million. To be sure, Starbucks doesn’t split out U.S. revenue from the Americas, so Bloomberg’s estimates are on an average per-store basis -- and based on figures for fiscal 2017, which ended October 1 last year (the company also owns stores in Canada and Brazil).

The (estimated) cost could well be worth it for the coffee behemoth, as it faces opprobrium in its home -- and biggest -- market after a manager summoned police after two men waited at a Starbucks table without ordering.

Starbucks’ shares haven’t seen much of an effect, but the company has called the arrests a “reprehensible outcome” and vowed to do better. The gesture may also not affect too many customers on the day seeking a blonde espresso or caramel macchiato, though: About 41 percent of locations aren’t Starbucks-owned and may still remain open.

--With assistance from Leslie Patton

To contact the reporter on this story: Clementine Fletcher in New York at cfletcher5@bloomberg.net.

To contact the editors responsible for this story: Sarah Kopit at skopit@bloomberg.net, Nick Turner

©2018 Bloomberg L.P.