Starbucks is parting ways with its CEO and hiring Chipotle’s chief to lead the coffee chain as it seeks to revive declining sales and appease outside investors.
Starbucks announced Tuesday that Brian Niccol, who has led the Mexican-style chain since 2018, will take control of the coffee giant starting next month.
Laxman Narasimhan, who was with Starbucks for less than two years, is leaving the company.
Starbucks shares rose 14% in premarket trading on the news.
The coffee giant’s performance has been difficult this year, hampered by weak sales in the US and China. She also faced increasing complaints from customers about decline in service quality and rising prices. The company has recently come under pressure from so-called activist investors who have bought large stakes to force change.
Ironically, Chipotle has also faced similar criticism: It raised prices earlier this year and also faced a wave of criticism on social media over uneven portion sizes. But Chipotle has weathered these problems better recently reporting strong earnings which has weathered a broader industry downturn.
But in its statement announcing the move, Starbucks said Niccol had “transformed” Chipotle.
“His focus on people and culture, brand, menu innovation, operational excellence and digital transformation have set new standards in the industry and driven significant growth and value creation,” Starbucks said. She added that Chipotle’s stock price increased nearly 800% during her tenure, “while also increasing retail team member salaries, expanding benefits and strengthening the culture.”
Starbucks CFO Rachel Ruggeri will take on the role of interim chief executive until September 9, when Niccol will officially assume the top role.
Chipotle COO Scott Boatwright will serve as the burrito chain’s interim CEO. Chipotle CFO Jack Hartung, who had planned to retire next year, will now remain president of strategy, finance and supply chain.
This is a developing story. Please check back for updates.
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