Update – Starbucks Closes Forbidden City Store

Monday, July 16, 2007 17:08

Nearly 8 years since Starbucks moved into the Forbidden City, and 8 months since TV anchor Rui Chenggang renewed the call for their immediated closure, Starbucks has announced they will close.

some news outlets are reporting that they were kicked out, but I am more likely to believe that they were (as Eden Woon states) given an offer they could refuse:

Businessweek: Starbucks, for its part, downplays the importance of the store’s closure and says the company was given the option of continuing its coffee business in the same location, albeit not under the Starbucks name. “We would have had to use the Forbidden City as our brand. The other choice was to shake hands and part ways,” explains Eden Woon, Starbucks’ vice-president for Greater China. “We decided we can’t operate a store that on the marquee says Forbidden City Coffee.”

For those in retail, the fact that Starbucks was able to hold this piece of property for so long is something to be respected in economic terms as most major brands have difficulty cultivating brand loyalty in China, and store turnover rates run high.

Macro wise, this closure has little symbolism for or impact on investment in China. Starbucks stores around China are opening at a faster rate than they were before, and by all indications Starbucks is doing quite well here.

It was just time for this store to close.

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