Starbucks Replaces CEO Laxman Narasimhan With Chipotle’s Brian Niccol

Starbucks has said that Laxman Narasimhan will step down as CEO, with Chipotle Mexican Grill’s Brian Niccol set to takeover. 

The coffee giant’s decision to bring in Niccol, a seasoned executive known for his successful turnaround of Chipotle, has already helped boost investor confidence, sending Starbucks’ shares soaring by 24 per cent.

Narasimhan’s departure comes just a year and a half after he was appointed to lead Starbucks through a period of reinvention. However, under his leadership, the company’s stock continued to struggle, losing nearly one-quarter of its value. The challenges facing Starbucks have been mounting, with increasing competition, declining demand in key markets like the United States and China, and growing pressure from activist investor Elliott Investment Management, which holds a USD 2 billion stake in the company.

Niccol’s appointment is being hailed as a major coup for Starbucks. Since joining Chipotle in 2018, he has been credited with revitalising the burrito chain, leading to a surge in annual sales and a tripling of the stock price. His reputation as a "fixer" and "doer" has earned him the respect of the investment community, which sees his move to Starbucks as a transformational step for the struggling coffee giant.

Elliott, which had been urging Starbucks to improve its operations, welcomed Niccol’s appointment, describing it as a significant move forward for the company. Despite speculation, Starbucks’ Board Chair Mellody Hobson clarified that Elliott was not consulted about the leadership change.

Niccol, who will officially take over on 9 September, becomes only the sixth CEO in Starbucks’ more than 50-year history. He succeeds Narasimhan, who had begun to steer Starbucks away from the hardline stance of former CEO Howard Schultz, particularly in dealing with the unionisation efforts at US stores. Under Narasimhan, Starbucks initiated talks for a national contract with Workers United, which has been seeking to organise the company’s workforce.

In the interim, Starbucks’ CFO Rachel Ruggeri will serve as acting CEO until Niccol’s official start. Meanwhile, Chipotle has named Chief Operating Officer Scott Boatwright as its interim CEO, as the company seeks a permanent replacement for Niccol.