After temporarily closing nearly half its stores in coronavirus hit in China, Starbucks Corporation (SBUX) has started to reopen them, citing an improved situation.
Starbucks has restarted operations in nearly 85% of its outlets, having closed them due to the coronavirus epidemic in China.
The CEO of Starbucks, Kevin Johnson, wrote to employees in a letter, “With the number of new cases in China slowing, we are seeing the early signs of a recovery in the region.”
Johnson shared a video featuring Belinda Wong, CEO of Starbucks China, at the reopened Shanghai Roastery, saying that she and all employees were “very, very excited to be back to work.”
Why It Matters
According to the Starbucks website, as of June 30, 2019, Starbucks had 30,000 stores across 80 markets. 4,100 of those stores are in 168 cities in mainland China where they employ more than 57,000 people.
Starbucks had warned in its 10-Q form filed to the Securities and Exchange Commission that the impact of store closures in China could not be “reasonably estimated” but had warned that it might “materially affect” the company’s international segment and consolidated results for Q2 2020 and Fiscal 2020.
Retail in China has been limping back to normal. On Monday, Apple Inc. (AAPL) announced that it was reopening stores in the country as well.
Starbucks shares traded 0.87% lower at $77.61 in the after-hours session on Thursday. The shares had closed the regular session 2.95% lower at $78.29.