Starbucks CEO Laxman Narasimhan has been removed from the role after only a year and a half after a larger than expected drop in sales. Brian Niccol of Chipotle was named his replacement and will assume the role September 9. He has been credited with growing Chipotle’s stock price by nearly 800 percent under his leadership.
Narasimhan, who was scrutinized for his lack of experience in the restaurant sector, was facing growing pressure to improve the financial performance of the coffee chain, which has faced weaker demand amid price rises and boycotts related to the war in Gaza. Global sales had fallen by three percent during its third quarter, greater than analysts’ forecasts and another disappointing blow to the company, which has experienced slumps in the U.S. and Middle East and plunging sales in China, to the tune of 14 percent.
Starbucks’ shares grew more than 20 percent after the announcement, while Chipotle stock saw a fall of more than 10 percent, signalling the confidence in Niccol’s ability to turn profitability around. In the interim, Chief Financial Officer Rachel Ruggeri will serve as Chief Executive Officer.
