Starbucks reportedly announced on Tuesday that it was replacing current CEO Lakshman Narasimhan with Chipotle leader Brian Niccol after months of sluggish sales.
Niccol has been widely praised for turning around Chipotle’s business, helping to drive up the company’s stock price by more than 50 percent over the past year, the company said. Niccol will join the board on Sept. 9. According to the Wall Street Journal:.
The sudden leadership change follows a 20% drop in Starbucks shares since Narasimhan took over at the helm of the company a year and a half ago, succeeding former CEO Howard Schultz.
Schultz, who built the chain into a global giant in the 1990s, criticized Narasimhan’s management style on LinkedIn in May.
“Having followed Brian’s leadership and transformation journey at Chipotle, I have long been impressed with the impact of his leadership,” Schultz said of Nicol in a statement. “His track record of retail excellence and delivering exceptional value to shareholders recognizes the human element that is essential to leading a culture- and values-driven company.”
“I believe he is the leader Starbucks needs at this critical moment in its history. I respect him and have his full support.”
Starbucks is implementing changes to its service procedures to appease activist investors Elliott Investment Management and Starboard.
According to reports, Narasimhan will step down from his roles as CEO and director with immediate effect.
Mellody Hobson, who will serve as the company’s chairman of the board from 2021, will become lead independent director.
