Starbucks has announced a significant leadership change on Tuesday, replacing CEO Laxman Narasimhan with Chipotle CEO Brian Niccol.
As per CNN, the move comes as the coffee chain grapples with declining sales in its key markets, the US and China.
Starbucks shares surged 10% in premarket trading following the news, while Chipotle’s stock fell by the same percentage.
Narasimhan, who became CEO in March 2023, is stepping down immediately. During his tenure, Starbucks’ shares fell 21%, not counting the recent rise.
Meanwhile, Rachel Ruggeri, Starbucks CFO, will serve as interim CEO until Niccol officially takes over on September 9.
Niccol has been Chipotle’s CEO since 2018, leading the company through a successful recovery from its food safety issues and steering it through the pandemic.
Mellody Hobson, Starbucks’ new lead independent director, expressed confidence in Niccol’s ability to drive innovation and growth, citing his successful tenure at Chipotle.
While, former CEO Howard Schultz, who previously criticized Narasimhan’s leadership, has also voiced his support for Niccol.
To note, Starbucks has been facing challenges, including a 3% drop in global sales at stores open for at least a year and a 2% decline in its North American market.
