On July 2, 2008, Standard&Poor's Ratings Services places its ratings on Starbucks Corp., including the 'BBB+' long-term corporate credit and 'A-2' short-term ratings, on CreditWatch with negative implications. The CreditWatch placement follows Seattle-based Starbucks' announcement yesterday that it will close approximately 600 underperforming company-owned stores in the U.S.--far more than the 100 store closures previously announced. The company estimates costs associated with the store closures to be between $328 million and $348 million; cash charges are expected to be about $100 million net of tax. In addition, the company announced that it will slow growth of company-operated U.S. stores to less than 200 in 2009. While we do not expect credit metrics to change significantly due to the
