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Starbucks settles its lawsuit over Teavana closures

The settlement with Simon Property Group would apparently allow some locations to shut down.

Starbucks has settled its lawsuit with a big mall owner over the closure of some of its Teavana locations, the company confirmed on Tuesday.

The settlement with Simon Property Group will apparently pave the way for some additional Teavana retail locations to close.

Starbucks would not say how many locations would close. But local reports suggest some locations have started preparing to shut their doors.

Starbucks in July said it would shut all 379 retail locations of its tea brand, with plans instead to serve Teavana drinks inside of its coffee shops.

But Simon, a major retail property owner, sued over the status of 77 of those locations. In November, a judge somewhat surprisingly agreed with Simon, granting a temporary injunction forcing Starbucks to keep those locations open. Some of the leases held by Simon extend as far as 2027.

The ruling had the potential to have a significant impact on lease negotiations, though experts expected a settlement.

Late last month, the Indiana Supreme Court agreed to hear the case, bypassing the state’s Court of Appeals in a move described in local reports as rare.

“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,” Starbucks spokesman Reggie Borges said in an emailed statement.

Starbucks has big plans to grow in Asia, in particular in China, and views the tea brand as a key part of that strategy. The company sold its Tazo tea brand to focus on Teavana, and has started offering new and innovative drinks inside its stores around the brand.

Starbucks executives said last month that Teavana has contributed at least two points to the company’s same-store sales in China since introducing the brand in the country last year. The company also plans to sell more Teavana drinks inside grocery stores, convenience stores and other packaged goods channels.

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