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Starbucks settles with Simon, begins closing Teavana stores

A back-and-forth battle between the nation’s top coffee shop chain and premium mall owner finally appears to be settled.

Simon Property Group took Starbucks to court for violating its lease covenant to operate when the coffee giant announced it would shutter its Teavana business and close 77 such shops in Simon malls. In early December, an Indiana judge issued a temporary order barring Starbucks from closing the shops, but when the state’s Supreme Court announced it would hear a Starbucks appeal, the two sides moved to the negotiating table.

“We’ve reached an agreement with Simon to settle our dispute,” Starbucks spokeswoman Sanja Gould told the New York Post, though she did not elaborate on terms. Calls made by the Post to Simon malls found two Teavana stores in the process of closing.

Still, Simon may have gotten what it wanted from the publicity surround the court proceedings. When the “brew-haha” began back in August, real estate lawyer Dana Kreis Glencer of Dawda Mann in Bloomfield Hills, Mich., told Chain Store Age the mall owner wanted to send a message that it wouldn’t make it easy for lease-holders to walk away from their stores.

“Simon is probably taking the approach that, if we don’t take a stance and oppose the closure, other tenants who may have a failing or less than profitable retail store might say, ‘Well, we’re going to close our stores like Teavana did since Simon will not likely enforce our covenant to operate,’” Glencer said at the time.

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