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Starbucks barred from closing Teavana stores in Simon Malls

A mall owner has won an unusual victory over Starbucks Corp.

In August, Simon Property Group filed a breach of covenant suit against Starbucks for attempting to close 77 Teavana stores in Simon malls. At the time, one legal expert said Simon was drawing a line in the sand.

The bold move paid off for the premium mall owner when an Indiana judge temporarily barred Starbucks from executing the store closings. In a 55-page order, Judge Heather Welch opined that Starbucks was better positioned to sustain the $15 million hit for five months’ rent than Simon was.

“We are disappointed in the judge’s ruling and will continue to focus on finding a resolution,” Starbucks communicated in a statement.

Attorney Dana Kreis Glencer, a leasing specialist at the firm of Dawda Mann in Detroit, told Chain Store Age that Simon’s suit was filed on solid ground.

“Simon may be looking for a settlement, or they may be looking to create some good case law: ‘You violated your covenant to operate and you have to operate,’” she said.

In July, Starbucks announced it planned to close all 379 Teavana stores in the coming year.
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