CEO of Star­bucks chang­ing his role

The Denver Post - - BUSINESS - By The As­so­ci­ated Press

Star­bucks chair­man Howard Schultz is step­ping down as CEO of the cof­fee chain he joined more than 30 years ago and trans­formed into a global brand.

Schultz will be­come ex­ec­u­tive chair­man in April to fo­cus on in­no­va­tion and so­cial im­pact ac­tiv­i­ties, the Seat­tle-based com­pany an­nounced Thurs­day.

Kevin John­son, who was named pres­i­dent and chief op­er­at­ing of­fi­cer last year, will be chief ex­ec­u­tive as of April 3.

Schultz, 63, is cred­ited with turn­ing around Star­bucks’ for­tunes since re­turn­ing as its CEO in 2008. He has over­seen the ex­pan­sion of the chain’s food and bev­er­age of­fer­ings and the growth of its pop­u­lar loy­alty pro­gram and mo­bile app.

Star­bucks has cred­ited the re­wards pro­gram and app for help­ing con­sis­tently in­crease sales in the U.S., al­though growth has slowed more re­cently and traf­fic slipped in the lat­est quar­ter. Schultz has said such tech­nol­ogy adop­tions will be­come in­creas­ingly crit­i­cal for brick-and-mor­tar re­tail busi­nesses to thrive as shop­ping habits change.

Shares of Star­bucks slid 3.6 per­cent to $56.44 in af­ter-hours trad­ing.

Dur­ing a con­fer­ence call with re­porters to dis­cuss the an­nounce­ment, an an­a­lyst called Schultz a “mas­ter mer­chant” who has been able to de­ter­mine and even stim­u­late “what the Star­bucks cus­tomer wants and needs” and asked if that “mer­chant gene” would still be present in those lead­ing the com­pany. An­other noted that Star­bucks strug­gled af­ter Schultz stepped away as CEO in 2000, and asked what was dif­fer­ent this time.

Schultz said the com­pany has built a strong lead­er­ship team in re­cent years. He also noted that he is not leav­ing the com­pany, and would be work­ing on de­vel­op­ing the Star­bucks Re­serve Roas­t­er­ies, which are high-end re­tail con­cepts fea­tur­ing cof­fee beans and drinks such as “cold brew” cof­fee. Schultz called it the “next wave of re­tail in­no­va­tion.”

In a note is­sued be­fore Star­bucks an­nounced the change, RBC Cap­i­tal Mar­kets an­a­lyst David Palmer said he be­lieved the com­pany can re­gain its do­mes­tic sales mo­men­tum by fo­cus­ing on ex­pand­ing its re­wards pro­gram and the changes it is mak­ing to its food menu.

Kevin John­son, who was named pres­i­dent and chief op­er­at­ing of­fi­cer of Star­bucks last year, will be­come its chief ex­ec­u­tive April 3. Ted S. War­ren, The As­so­ci­ated Press

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