Starbucks appoints Chipolte chief Brian Niccol as new CEO
Starbucks has announced the appointment of Brian Niccol, the CEO of Chipotle Mexican Grill, as its new chairman and chief executive officer. This decision comes after Laxman Narasimhan's sudden resignation from his position as CEO and board member. The transition will officially take place on September 9. In the interim period, Starbucks's CFO Rachel Ruggeri will serve as acting CEO.
Company expresses confidence in Niccol's leadership
Starbucks has expressed confidence in Niccol's leadership abilities. In a blog post, the company stated, "Our board believes he will be a transformative leader for our company, our people, and everyone we serve around the world." Niccol also shared his excitement about joining Starbucks, expressing gratitude for the opportunity to help steward this firm alongside hundreds of thousands of partners.
Shares surge following Niccol's appointment
The announcement of Niccol's appointment led to a significant shift in stock market trends. Starbucks shares surged by 12% in premarket rading following the news, while Chipotle shares experienced a 10% drop. This leadership change comes after Starbucks had to lower its guidance for a third consecutive quarter in May 2024, and reported its first sales decline since late 2020.
Narasimhan's tenure and future plans for Starbucks
Narasimhan had succeeded Howard Schultz as CEO, who had come out of retirement to serve as interim CEO during the company's search for a new chief executive. Prior to joining Starbucks, Narasimhan served as CEO of Reckitt, a UK-based consumer health and nutrition company. He also held an executive position at Pepsico for many years. The decision to replace Narasimhan follows reports that activist investors Elliott Investment Management and Starboard Value have been accumulating stakes in Starbucks.
Starbucks in talks with activist investors
The coffee chain has been in discussions with Elliott about adding Jesse Cohn, a managing partner at the activist investor, to its board of directors. Starbucks is also considering setting up committees to review capital allocation and operational improvements. In the wake of Niccol's departure, Chipotle announced that its board has appointed Chief Operating Officer Scott Boatwright as interim CEO.
