Starbucks Corp. is converting three Teavana locations in New York to its coffee brand, and is closing one Teavana unit in Beverly Hills, Calif., as it continues to expand tea offerings in its coffee shops, the company said Friday.

The Seattle-based coffeehouse operator said 350 Teavana retail locations remain as it continues to incorporate its $620 million acquisition of Atlanta-based Teavana Holdings Inc., completed in December 2012.

“As Starbucks continues to evolve the business, the company has made the decision to convert three tea bar locations in New York to full Starbucks stores and close the Beverly Hills location, which is adjacent to a Starbucks store,” the company said in a press release Friday.

A Starbucks spokeswoman said the conversion to Starbucks units in New York City will start in April, and the Beverly Hills location will close later this year.

“Teavana’s University Village store in Seattle, Wash., will continue to operate and bring innovation to the tea category and to Starbucks’ beverage pipeline,” the company said.

Starbucks said that in fiscal 2015, Teavana-branded tea beverages generated nearly $1 billion in sales through Starbucks locations in the United States, an increase of 12 percent over the prior year.

“And tea, once again, added a point to comp in Q1FY16, continuing the growth momentum of the past few years,” the company said.

“The tea category in Starbucks stores is growing double-digits across the U.S. and Canada store portfolio, with Starbucks well on its way to building the Teavana business to over $3 billion over the next five years,” the company said.

Starbucks said it will help employees in the four locations cited Friday find positions at nearby Teavana or Starbucks units.

The company also said it will continue to expand the Teavana brand into the China/Asia Pacific and Europe, Middle East and Africa regions.

On Thursday, Starbucks reported that same-store sales rose 9 percent in the Americas region, which includes the U.S., during the first quarter ended Dec. 27. Traffic climbed 4 percent.

First-quarter net income declined about 30 percent, to $687.6 million, or 46 cents per share, from $983.1 million, or 65 cents per share, a year ago, including costs associated with the acquisition of Starbucks Japan last year.

The company said consolidated net revenue for the company increased 12 percent, to a record $5.4 billion, driven in part by the addition of 1,693 net new locations in fiscal 2015.

Starbucks ended the quarter with 23,571 units in 70 countries.

Contact Ron Ruggless at Ronald.Ruggless@Penton.com
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