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The Australian reports that Starbucks has decided to close 61 of the 84 stores that its has been operating in Australia, with reports saying that the company has lost well over $100 million since it began opening stores there. The 681 people who will lose their jobs are not getting a lot of notice – the closures are slated to take place this weekend.

The 23 surviving stores are said to be in the east coast cities of Melbourne, Sydney and Brisbane.

The company said yesterday that the moves were part of a broad geographic re-examination of its business that resulted in the elimination of money-losing or under-performing operations, and reflected specific “business challenges unique in the Australian market.” Some analysts said that Australian consumers never developed a taste for the Starbucks brand of coffee, and that prospects were dim that they ever would.

Meanwhile, even as Starbucks was closing more than 72 percent of its Australian locations, the company announced that it will eliminate 1,000 non-store positions and realign its top management. Falling into the latter category – James Alling, who is leaving the company and his post as president of Starbucks Coffee International. Alling will be replaced by COO Martin Coles, who used to run international for the company.

CEO Howard Schultz said that the executive changes were designed to give him a “direct line of sight” into the company’s various businesses and functions. “As we have continued to execute our strategy,” he said in a statement, “it became increasingly more evident that a razor-sharp, unrelenting focus on our business is vital to our success. As CEO, I understand this is a non-negotiable requirement.”

KC's View:
Starbucks’ quarterly results are scheduled to be released later today…and I think it is a pretty good bet that they are not going to be good.

But what would concern me even more if I were a shareholder in the company, or an employee there, is the perception that Starbucks is behaving tactically rather than strategically, is being reactive instead of proactive, and seems to be making moves out of desperation as Schultz looks to recapture the magic of the company’s early growth days. He may want a “direct line of sight,” but this begins to sound ever so slightly like micro-management. Which probably isn’t good.

Here’s a question that occurs to me: Why not just close all the Australian stores? After all, if you’re going to deal with the agony of defeat, why not just make the big move and be done with it? Is it really worth it for Starbucks to keep 23 stores open there, or would it make more sense to just cut its losses completely and move on?

It seems the same sort of approach that had the company announcing that it was getting back to its coffee roots…and then announce a line of smoothies. Announce that it as closing 600 stores, and then let the news leak out that it would be replacing Dunkin’ Donuts in more than a hundred Stop & Shop stores. Or say (precipitously, in my mind) that it was eliminating breakfast sandwiches, and then change its mind because the sandwiches are being reformulated to be less aromatic (which I hope doesn’t translate to being less tasty).

Here’s the thing. I continue to root for Starbucks. Love the coffee. Love the shops. Venti skim lattes are an important part of my diet.

But few of the company’s recent moves seem like they are part of a broad strategic plan where the final picture is being clearly envisioned by management.

I’d like to be proven wrong.