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Popular coffee chain shuts location, may file Chapter 11 bankruptcy

Rebecca French

There’s always a specialty coffee drinker around during the holidays, whether they’re a fan of Starbucks’ Peppermint Mocha or Creme Brulee Latte, or a fan of Pete’s Dubai-style Chocolate Matcha or Pistachio CBOL.

Due to higher demand this time of year, the wait at a coffee shop or drive-thru for these holiday treats may be longer than usual.

But many customers believe it’s worth the wait to sample these delicious drinks.

Unfortunately, the rest of the year may not be as bright and shiny as the holiday season looks, as coffee chain giant Starbucks plans to close hundreds of stores. Peet’s has also closed a few locations, but there’s some good news on the horizon.

Starbucks revealed in September that it would reduce its North American store count by about 1%, from 18,734 stores to 18,300, by the end of fiscal 2025, as part of a restructuring that is expected to cost the coffee giant $1 billion.

Starbucks reviewed its North American portfolio earlier this year to determine which stores it would close.

“During our review process, we identified some cafes that were unable to create the physical environment that our customers and partners expect, or where we did not see a path to financial performance, and those cafes will be closed,” Starbucks CEO Brian Niccol said in a statement.

The company will close stores that are underperforming or unable to meet new design standards. The company is undertaking a multi-year renovation plan for 1,000 stores at a cost of $150,000 per store by 2026.

  • By the end of fiscal 2025, the number of stores will be reduced by 434, or 1%.

  • Renovate 1,000 locations by the end of 2026 at a cost of $150,000 per store.

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Peet’s, which has more than 250 stores in the United States, including 199 corporate-owned stores, closed its Roseville, Calif., store in May, the Sacramento Airport store in September and the Mill Valley store in November, The E’ville Eye reported.

Good news for Peet’s came in August, when Keurig Dr Pepper revealed that it would acquire the company’s parent company, JDE Peet’s, for $18 billion. The transaction is expected to be completed in the first half of 2026.

<em></img>Compass Coffee has closed a roastery in Washington, D.C., and could file for bankruptcy before the end of the year.</em>” loading=”eager” height=”540″ width=”960″ class=”yf-lglytj loader”/></div> </div><figcaption class=Compass Coffee has closed a roastery in Washington, D.C., and could file for bankruptcy before the end of the year.

Now, embattled Starbucks rival coffee chain Compass Coffee has agreed to vacate its Washington, D.C., roastery and said in court documents it may file for bankruptcy protection by the end of the year.

The Washington, D.C.-based coffee company agreed to give up its roasting facility at 1401 Okey Street, nearly three months after D.C. Superior Court Associate Judge Leslie Meek ordered Compass Coffee to pay monthly rent in September as the landlord’s lawsuit against the tenant continues, the Washington Business Journal reported.

Compass Coffee’s landlord, the American Armed Forces Mutual Aid Association, filed for a protective order in September requiring the tenants to make a down payment of more than $113,000 and then make monthly payments of more than $116,000 starting Oct. 1, and a judge granted the request.

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More closures:

Court documents show the tenant has not paid rent since January 2025.

Compass Coffee CEO Michael Haft and Theodore B. Randles, an attorney at the company’s Venable LLP, said in September that if the coffee chain couldn’t negotiate for rent reductions, the company would have to vacate space and could even file for bankruptcy.

Compass Coffee owes its landlord, the Armed Forces Mutual Aid Association, more than $744,000 in rent and related fees, the Washington Business Journal reported.

The coffee company also owes more than $300,000 in back rent, according to a lawsuit filed by the property’s former landlord, Douglas Development Corp.

Compass Coffee was founded in 2014 and currently operates 25 stores in Washington, D.C., Virginia and Maryland.

  • 4710 Langston Blvd., Arlington, Virginia

  • 4300 Wilson Blvd., Arlington, VA

  • 4100 Wilson Blvd., Arlington, VA

  • 3003 Washington Blvd., Arlington, VA

  • 7393 Lee Highway, Falls Church, Virginia

  • 1201 Wilson Blvd., Arlington, VA

  • 4850 Massachusetts Ave. NW, Washington, DC

  • 1351 Wisconsin Ave. NW, Washington, DC

  • 2150 P St. NW, Washington, DC

  • 849 18th St. NW, Washington, DC

  • 1703 H. St. NW, Washington, DC

  • 1827 Adams Mill Road NW, Washington, DC

  • 1401 I St., Washington, DC

  • 1924 14th St. NW, Washington, DC

  • 1301 K Street NW, Washington, DC

  • 555 13th St. NW, Washington, DC

  • 435 11th St. NW, Washington, DC

  • 1023 7th St. NW, Washington, DC

  • 1921 8th St. NW, Washington, DC

  • 1535 7th St. NW, Washington, DC

  • 650 F St. NW, Washington, DC

  • 1201 Half Street, Washington, DC

  • 821 I St. SE, Washington, DC

  • 10400 Fairfax Blvd., Fairfax, VA

  • 4210 Knox Road, College Park, MD

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This article was originally published by TheStreet on December 19, 2025, and first appeared in the Restaurant section. Click here to add TheStreet as your preferred source.

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