Simon Property Group and Starbucks Corp. have reached a settlement over a lawsuit by the mall owner that had sought to prevent Starbucks from closing Teavana stores in its shopping centers.
In November, an Indiana judge ordered the coffee giant to halt from closing Teavana stores in 77 retail locations owned by Simon. Starbucks filed an appeal against the preliminary injunction.
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"We've reached an agreement with Simon to settle our dispute," said Sanja Gould, a spokeswoman at Starbucks. "We are thankful to our customers who have enjoyed Teavana tea at these specialty retail locations and will continue to emphasize Teavana tea in new and different ways at Starbucks." She declined to comment on potential dates for closures.
Simon didn't respond to requests for comment.
Starbucks in July said it planned to close all 379 locations of Teavana, a chain of high-end tea shops, by the spring of 2018, noting the stores' underperformance likely would continue, in part because of weak foot traffic in malls.
The following month, the Indianapolis-based real-estate investment trust filed a lawsuit to prevent Starbucks from closing stores in its properties, saying it would suffer irreparable harm if the coffee giant were permitted to breach its lease obligations.
There has been an increase in bankruptcies and store closures over the past year as retailers struggle with fast-changing consumer tastes, competition from online merchants and an oversupply of stores in certain regions.
More tenants are asking for lease concessions and fewer penalties for abandoning leases, but landlords are trying to hold the line. Many say there is ample foot traffic in malls and that retailers should be more engaging and provide more compelling merchandise to convert shoppers into paying customers.
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(END) Dow Jones Newswires
January 16, 2018 14:21 ET (19:21 GMT)