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<\/p>\nA Superior Court judge in Indiana has blocked Starbucks from closing 77 Teavana locations in malls operated by Simon Property Group.<\/p>\n
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In August, after Starbucks announced it would close all 379 Teavana locations, Indianapolis-based Simon, the largest shopping mall operator in the world, filed suit seeking a temporary and permanent injunction. In the suit Simon argued that the company \u201cdepends upon each tenant fulfilling the covenants in their respective leases. Crucially, each of Simon\u2019s tenants promises that it will open and operate continuously for the entire term of its lease.\u201d Only two of the leases expire next spring, some extend to 2027. Starbucks is not trying to void the agreements, only to close the stores. Lease payments for the remaining terms will be made in full. The mall operator acknowledged that many shops close under financial duress but \u201cthat obviously is not the case with Starbucks, which is one of the largest and most recognized companies in the world.\u201d![](\"https:\/\/s25491.pcdn.co\/wp-content\/uploads\/2017\/12\/End-cap-holiday-display-1_preview-300x225.jpeg\")
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The suit alleges that by closing the stores en masse Starbucks was \u201cshirking its contractual obligations at the expense of Simon\u2019s shopping centers and the dozens of communities they serve and support.\u201d If Starbucks is allowed to \u201cprematurely\u201d break its lease, it could be forced to fill the vacancies with \u201cless creditworthy tenant(s)\u201d or less desirable tenants \u201cwho will only agree to less desirable lease terms, and\/or a shorter-term lease,\u201d according to the court filings. \u201cStarbucks\u2019 decision to close its Teavana stores is simply an effort to further increase its economic gains at the expense of others,\u201d Simon said in the 18-page complaint.<\/p>\n
Starbucks issued a statement expressing \u201cdisappointment\u201d in the judge\u2019s ruling and said it \u201cwill continue to focus on finding a resolution.\u201d The company did not disclose whether it would appeal.<\/p>\n
The injunction is a first and could establish precedent for other mall tenants. No court has previously forced a non-anchor tenant to continue operations.<\/p>\n
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The <\/em> reported that Judge Heather Welch, in a 55-page order, found that the very profitable Starbucks could absorb the financial hit \u2014 estimated by Starbucks to be $15 million over five months \u2014 better than Simon could. The mall operator did not provide an estimate of how much the closings of the Teavana stores would cost.<\/p>\n The case is being closely watched by retailers and landlords alike amid a retail meltdown that has resulted in a record number of bankruptcies and more than 6,300 store closings this year, according to the newspaper. \u201cIf you are a tenant that has to close a bunch of stores that are based in malls, you are pretty scared after this ruling,\u201d the newspaper reported, adding that industry sources suggested that other mall operators may now challenge Starbucks\u2019 plans to close Teavana stores in their shopping centers.<\/p>\n Source: , <\/em><\/p>\n A Superior Court judge in Indiana has blocked Starbucks from closing 77 Teavana locations in malls operated by Simon Property Group. In August, after Starbucks announced it would close all 379 Teavana locations, Indianapolis-based Simon, the largest shopping mall operator in the world, filed suit seeking a temporary and permanent injunction. In the suit Simon<\/p>\nRelated Posts:<\/h3>\n
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