Starbucks Designates Indian-Origin Laxman Narasimhan As New CEO
CEO Insights Team, 0
Starbucks faces a turbulent period. More than 200 of its US stores have unionized in the past year, with workers pushing for better benefits and wages at a time of surging inflation. The company is also reworking its business model from a focus on cafes that encouraged long visits to mobile pickup and delivery, while facing higher costs for ingredients and labor. Also, COVID restrictions in China have slowed the US coffee chain's business in one of its biggest overseas markets.
Narasimhan will join Starbucks in October but will take the helm in April 2023, after spending a few months learning about the companyand its `Reinvention' plan, which includes paying better wages for baristas, improving employee welfare and customer experience &
re-imagining stores. Until then, interim-CEO Howard Schultz, who took back the reins of the company for the third time in April after Kevin Johnson retired, will continue to lead the company.
"He is a strategic and transformational leader with deep experience in building powerful consumer brands", Schultz said in a letter to employees welcoming Narasimhan. He joined Reckitt in September 2019 and was the first external candidate to take the helm at Reckitt since it was formed in 1999. He led the company through the pandemic, which boosted sales of its health and hygiene products, and more recently navigated a baby formula crisis in the US, culminating in a raise in its annual forecast earlier this year.
The 55-year old, who previously worked at PepsiCo as its global chief commercial officer, gained plaudits from Reckitt investors for his management style after helping revitalize the company after a sales slump. "He took a very balanced approach to strategy he didn't go in all guns blazing, he took a very systematic approach to get things right", said Ashish Sinha, portfolio manager at Reckitt shareholder Gabelli.
Starbucks said Narasimhan will spend his time with Schultz and the management team, spending time as a barista, meeting employees & visiting manufacturing plants & coffee farms during the transition period. "While we are surprised Starbucks chose a successor outside the discretionary sector, we are optimistic Narasimhan's global perspectives as a CEO of a public multinational corporation and background in beverages at PepsiCo will serve Starbucks well into the next chapter", Cowen analyst Andrew Charles wrote in a note. The coffee chain's shares were barely changed in after hours trade, gaining less than 1 percent. They are down 24 percent since Schultz's return as interim CEO.
"He is a strategic and transformational leader with deep experience in building powerful consumer brands", Schultz said in a letter to employees welcoming Narasimhan. He joined Reckitt in September 2019 and was the first external candidate to take the helm at Reckitt since it was formed in 1999. He led the company through the pandemic, which boosted sales of its health and hygiene products, and more recently navigated a baby formula crisis in the US, culminating in a raise in its annual forecast earlier this year.
The 55-year old, who previously worked at PepsiCo as its global chief commercial officer, gained plaudits from Reckitt investors for his management style after helping revitalize the company after a sales slump. "He took a very balanced approach to strategy he didn't go in all guns blazing, he took a very systematic approach to get things right", said Ashish Sinha, portfolio manager at Reckitt shareholder Gabelli.
Starbucks said Narasimhan will spend his time with Schultz and the management team, spending time as a barista, meeting employees & visiting manufacturing plants & coffee farms during the transition period. "While we are surprised Starbucks chose a successor outside the discretionary sector, we are optimistic Narasimhan's global perspectives as a CEO of a public multinational corporation and background in beverages at PepsiCo will serve Starbucks well into the next chapter", Cowen analyst Andrew Charles wrote in a note. The coffee chain's shares were barely changed in after hours trade, gaining less than 1 percent. They are down 24 percent since Schultz's return as interim CEO.