CEO of Starbucks changing his role
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