Starbucks on August 13 said Chipotle Mexican Grill's head Brian Niccol will replace chairman and chief executive officer Laxman Narasimhan just a year after he took over.
Starbucks said Niccol will start in his new role on September 9 and the coffee chain's CFO Rachel Ruggeri will serve as interim CEO until then.
“Our board believes he will be a transformative leader for our company, our people, and everyone we serve around the world,” the coffee chain said in a blog post.
Also read: Who is Niccol Brian? Know all about Starbucks' new CEO
“I am excited to join Starbucks and grateful for the opportunity to help steward this incredible company, alongside hundreds of thousands of devoted partners,” the newly-appointed CEO said.
Narasimhan, who was appointed as the company's head in September 2022, is stepping down from his role as CEO and as a member of the Starbucks board with immediate effect.
Starbucks shares jumped 12 percent on the news in premarket trading, while Chipotle shares fell 10 percent.
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In May 2024, Starbucks had to cut guidance for a third straight quarter and posted the first sales decline since late 2020.
Narasimhan had succeeded longtime Starbucks leader Howard Schultz, who came out of retirement last spring to serve as interim CEO while the company searched for a new chief executive. Starbucks had announced in September 2022 that Narasimhan would become the CEO.
Narasimhan had recently served as a CEO of Reckitt, a UK-based consumer health and nutrition company. Prior to that he was a long time executive at Pepsico.
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The abrupt leadership shakeup comes after activist investors Elliott Investment Management and Starboard Value reportedly amassed stakes in the company. Starbucks and Elliott were in talks to add Jesse Cohn, a managing partner at the activist investor, to its board of directors. The coffee chain was also considering setting up committees to review capital allocation and operational improvements.
Meanwhile, Chipotle said its board had appointed chief operating officer Scott Boatwright as interim CEO.
Mellody Hobson, Starbucks board chair, will become lead independent director. Narasimhan will also step down from his seat on the board.
Niccol joined Chipotle as CEO in 2018 and became chair of the company’s board in 2020. Before joining Chipotle, he was the CEO of Taco Bell.
With agency inputs
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