Starbucks : Current boss Lakshman Narasimhan is resigning as chief executive and director of Starbucks
Starbucks : Brian Niccol, Chipotle’s chief executive of less than two years is moving on to become Starbucks’ new CEO, replacing current boss Laxman Narasimhan after a little more than one year in the top job.
The statement added that Narasimhan was resigning as chief executive and a director of Starbucks “effective immediately.”
Starbucks shares traded up about 21 percent Tuesday afternoon, while Chipotle Mexican Grill dropped eight percent.
The leadership changes arrive as the company attempts to sets its business right and broader sales declines in recent financial results.
The bruising April earnings report also hammered Novartis stock and prompted Narasimhan to pledge a reset.
Starbucks blamed softening consumer sentiment and increased market competition in China for its recent woes.
Activist investor Elliott Investment Management, which has a stake in the chain and been pushing to get more value out of its shares, also pressured the company.
The coffee giant is in the meantime moving to bring those contracts back into alignment with unionized stores.
Lynne Fox, the president of Workers United union, said in a statement Tuesday: “We are eagerly dedicated to further collaboration with Starbucks over such massive outstanding litigations and to securing fair collective bargaining agreements during the upcoming months.”
Replacing Laxman Narasimhan as CEO of Starbucks is a reflection “increased frustration with the way in which narow [sic] interest investors — including activists funds – have been campaigning to take more control over operations and direction” at chains, said GlobalData Managing Director Neil Saunders via statement
While some of the slowness comes from a delayed consumer backlash, “a lot also has to do with deteriorating store experience and an absence of innovation – especially in food,” he said.
Bringing Niccol on could see investors hoping for some day-to-day efficiencies.
Starbucks board chair Mellody Hobson said in a statement as the company announced an impending leadership change: “Brian is a culture carrier who brings significant experience and expertise stemming from accelerating global growth at scale across product, retail and tech industries.
Chipotle CEO Niccol has lead the company since 2018.
Starbucks said its taps Chipotle CEO to lead the coffee company. — In announcing his appointment as Starbucks’ new chief executive, the chain observed that Ells’ efforts at Chipotle had “led substantial growth and value creation,” including nearly doubled revenues and increased profit.
Into that void stepped Narasimhan, a veteran of PepsiCo and other consumer brands who took the reins in 2023 following an apprenticeship with longtime Starbucks CEO Howard Schultz.
The statement said that Narasimhan has “innovated the company’s supply chains” and improved its store operations since coming on board.
Niccol will assume his new post on September 9 while Starbucks CFO Rachel Ruggeri steps into the CEO interim role until that time.
