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Originally published Friday, July 18, 2008 at 12:00 AM

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Starbucks closing 16 more stores than expected

To be precise, Starbucks is closing 616 stores by the end of March. The company had said it would close 600 stores and released a list of...

Seattle Times business reporter

To be precise, Starbucks is closing 616 stores by the end of March.

The company had said it would close 600 stores and released a list of planned closures on Thursday afternoon. Sharon Zackfia, an analyst at William Blair & Co., counted the stores and included the exact number — 616 — in a research report on Friday.

In her analysis, Zackfia also found that about 54 percent of the locations are within about two miles of another Starbucks, "suggesting that management may have overestimated the store density potential in many markets."

In New York, 72 percent of the closures are near another Starbucks, she found.

The central part of the country will lose about 13 percent of Starbucks stores that are operated directly by the Seattle company. The Southeast will lose 10 percent, the Northeast 8 percent and the West 5 percent.

The closures affect only company-operated stores; some Starbucks locations are run by other companies like bookstores, grocery stores and airport vending businesses.

The 10 states losing the highest percentage of Starbucks are in the midportion of the country, Zackfia found, and average 45 Starbucks per state. The remaining 40 states average 170 Starbucks per state.

Fewer than 30 percent of closures in Iowa, Louisiana and Nebraska are near another Starbucks location, which Zackfia said indicates poor brand acceptance in those areas.

"That said, these three states combine for just 3 percent of the total U.S. population — hardly likely to be the death knell for Starbucks," she wrote.

Zackfia or members of her immediate family own Starbucks shares, and William Blair makes a market in the stock.

Melissa Allison: 206-464-3312 or mallison@seattletimes.com

Copyright © 2008 The Seattle Times Company

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