Approximately 600 Underperforming Stores will be Closed Company takes Significant Step toward Improving Long-Term Profitable Growth

SEATTLE, Jul 01, 2008 (BUSINESS WIRE) -- Starbucks Corporation (NASDAQ: SBUX) has announced the next step
in its multi-faceted plan to transform the company, with a decision to
close approximately 600 underperforming company-operated stores in the
U.S. market. This decision is a result of a rigorous evaluation of the
U.S. company-operated store portfolio and includes the 100 stores
targeted for closure in the company's previously announced plans. In
addition, Starbucks now expects to open fewer than 200 new U.S.
company-operated stores in fiscal 2009.

The majority of the store closures are scheduled to occur during
the remainder of fiscal 2008 and the first half of fiscal 2009. The
timing of the closures is dependent on finalizing third-party
agreements, and is therefore subject to change. Both full-time and
part-time retail positions will be eliminated, however the company
expects to place many of the affected partners (employees) into
available positions at nearby Starbucks stores.

"In January, we committed to transforming the company through a
series of critical and strategic initiatives to improve the current
state of our U.S. business and build the business for the long
term," stated Howard Schultz, chairman, president and ceo. "Our
executive and field leadership teams conducted an extensive review of
our U.S. company-operated store portfolio with a goal of enabling our
organization to focus its efforts on locations where we can more
effectively improve the customer experience."

"Throughout the history of the company, we have always aspired to
put our people first. This makes our decision to close stores
difficult, because it is disrupting the lives of the people who have
worked so hard to deliver superior service to our customers," Schultz
continued. "We sincerely thank each one of them and are very proud of
their many contributions to the company. At the same time, we
recognize that it is necessary to make decisions that will strengthen
the U.S. store portfolio and enable us to enter into fiscal 2009
focused on enhancing operating efficiency, improving customer
satisfaction and ensuring long-term value for our partners, customers
and shareholders."

The stores identified for closure are spread across all major U.S.
markets with approximately 70 percent of them opened since the
beginning of fiscal 2006. The executive and field leadership teams
used several criteria to identify stores for closure that included
locations that were not profitable at the store level and not
projected to provide acceptable returns in the foreseeable future. In
addition to site and market-specific criteria, consideration was given
to the impact of current and anticipated economic trends.

Pre-tax charges related to the store closures include
approximately $200 million of asset write-offs to be recognized in the
third quarter of fiscal 2008. In addition, a projected $120 to $140
million for lease termination costs and future lease obligations are
currently expected, nearly all of which will be recognized in the
fourth quarter of fiscal 2008 and the first half of fiscal 2009. Costs
associated with severance are currently estimated to be approximately
$8 million, and the company anticipates these charges to be recorded
during the same timeframe as the store closures. The aggregate pre-tax
charges associated with the planned U.S. company-operated store
closures, including costs associated with severance, are estimated to
be in the range of $328 to $348 million. Upon the completion of the
actions, cash charges are expected to result in a net cash outflow of
approximately $100 million, net of related income tax benefits.

Starbucks will reach out to customers who are impacted by the
store closures in a variety of ways including directing them to the
Starbucks Store Locator at www.starbucks.com. Customers who have
questions or comments on any store or their Starbucks Experience may
contact Starbucks Customer Relations via the web at
www.starbucks.com/customer/contact.asp.

Pete Bocian, chief financial officer, will host a half-hour
conference call for the financial community today, July 1, at 5:30
p.m. (ET) to discuss the announcement. The call will be available as
an audio webcast through the Investor Relations section of the
company's website at http://investor.starbucks.com. Starbucks is
scheduled to release its third quarter fiscal 2008 earnings on July 30
followed by a conference call and webcast, at which time the company
will provide additional comments and address the impact of the store
closures on its fiscal 2008 guidance.

About Starbucks

Since 1971, Starbucks Coffee Company has been committed to
ethically sourcing and roasting the highest quality arabica coffee in
the world. Today, with stores around the globe, the company is the
premier roaster and retailer of specialty coffee in the world. Through
our unwavering commitment to excellence and our guiding principles, we
bring the unique Starbucks Experience to life for every customer
through every cup. To share in the experience, please visit us in our
stores or online at www.starbucks.com.

Forward-Looking Statements

This release contains forward-looking statements relating to the
U.S. company-operated store closures, including statements regarding
the timing of store closures, charges and expenses relating to the
store closures and the related impact to partners, as well as plans
regarding net new company-operated stores for fiscal 2009. These
forward-looking statements, as well as the underlying estimates and
assumptions relating to such statements, are based on currently
available operating, financial and competitive information and are
subject to a number of significant risks and uncertainties. Actual
future results may differ materially depending on a variety of factors
including, but not limited to, risks related to achieving expected
costs savings, income tax and other benefits associated with the store
closures in the anticipated time frame, if at all, and the risks
detailed in the company's filings with the Securities and Exchange
Commission, including the "Risk Factors" section of Starbucks Annual
Report on Form 10-K for the fiscal year ended September 30, 2007 and
of Starbucks Quarterly Report on Form 10-Q for the fiscal quarter
ended March 30, 2008. The company assumes no obligation to update any
of these forward-looking statements.

(C) 2008 Starbucks Coffee Company. All rights reserved

SOURCE: Starbucks Corporation

Starbucks
Investor Relations:
Christy Linn, 206-318-7118
investorrelations@starbucks.com
or
Media:
Deb Trevino, 206-318-7100
press@starbucks.com
or
http://www.businesswire.com/cnn/sbux.shtml

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