Retail landlords win fight in Starbucks, Whole Foods store closures

David Simon, chairman in addition to chief executive officer of Simon Property Group

Patrick T. Fallon | Bloomberg | Getty Images

David Simon, chairman in addition to chief executive officer of Simon Property Group

Starbucks in addition to Amazon-owned Whole Foods are the latest victims of retail landlords pushing back against companies shuttering stores in addition to trying to bypass contractual agreements.

Recently, the largest U.S. mall owner, Simon Property Group, claimed a high-profile victory in court over Starbucks, which was planning to close 77 of its Teavana stores across Simon’s properties. Starbucks previously announced This particular summer the idea was planning to shutter all Teavana locations by the spring of 2018, as they were dragging down Starbucks’ overall financial performance.

However, an Indiana judge has ruled in Simon’s favor, preventing the coffee giant by closing 77 doors or facilitating any “going out of business” or similar sales, court documents reviewed by CNBC showed.

The lease agreements Starbucks originally signed with Simon for the Teavana brand require the tenant to be “open in addition to operating during normal business hours.” Some of those 77 leases still extend for up to another decade.

“We are disappointed inside the judge’s ruling,” a Starbucks spokeswoman told CNBC. “Our focus continues to be on finding a resolution.”

Then, on Thursday, a Washington court issued a similar ruling against grocery chain Whole Foods, which recently shuttered one of its 365-branded locations in a Bellevue, Washington shopping center, giving that will landlord in addition to various other surrounding tenants little-to-no notice.

The lease that will Whole Foods signed with “Bellevue Square LLC” in 2015 required the grocery chain to carry on business “without interruption” for the first 10 years of the contract. although Whole Foods moved quickly in October to close down that will 365 store, neglecting its obligations in addition to citing “site challenges” in addition to underperformance.

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