Today Starbucks (SBUX: chart, web, Y!) announced that they will be closing 600 stores in the next year.  The company originally proposed shutting doors on just 100 stores, but it seems the struggling U.S. economy has increased the need to trim the fat… er, the froth.

The company said that the additional 500 stores due for closing were not profitable, nor were they expected to be profitable in the foreseeable future.

One other interesting feature about these additional 500 stores is that they had been opened (all as recently as 2006) in close proximity to existing stores.  (The closest Starbucks to my house is also within 1.5 miles of the next-closest Starbucks…)

I wrote about Starbucks’ trouble back in April of this year, and at the time, they were trading around the $16 mark just before estimates.  While I predicted they’d miss earnings, they actually came right in line with the $0.15 per share consensus on the street.

Personally, I believe Starbucks delivers one of those feel-good luxury products that is grossly overvalued, and when the belt tightens, the five dollar coffee is the easiest habit to toss down the drain.

What do you think the future is for Starbucks? Can they still sell expensive coffee in a recessionary market?

Investing SBUX