Starbucks is replacing its CEO with one snagged from Chipotle. Brian Niccol, who's led Chipotle since 2018, will replace Laxman Narasimhan, who is stepping down as chief of the coffee chain after just 16 months, according to a Tuesday announcement. It's quite a surprise considering Narasimhan was "the first outside boss to lead the modern iteration of Starbucks and was the handpicked successor to Howard Schultz," per the Wall Street Journal. However, Schultz had "publicly criticized how Narasimhan and other executives were steering the chain," whose stock fell 22% after the March 2023 takeover. It has lately faced slowing sales and operating issues.
Rachel Ruggeri, Starbucks' executive vice president and chief financial officer, will lead the coffee chain until Niccol takes the reins on Sept. 9. He'll finish out the month with Chipotle—where he "presided over strong sales and profits" even amid price increases—before shifting roles, also serving as executive chairman of Starbucks' board, per the Journal. Starbucks' current board chair Mellody Hobson, who will become lead independent director, says board members were focused on long-term opportunities when they approached Niccol about two months ago.
The former Taco Bell CEO is "the whole package and that opportunity to get him was something that we thought couldn't be passed up," Hobson tells the Journal. "He has my respect and full support," Schultz adds in a statement. Chipotle's current chief operating officer, Scott Boatwright, has been named as interim CEO of the "fast casual" dining chain. The company's stock fell 12% following the announcement. Starbucks' stock, meanwhile, is up almost 21%, per Yahoo. That climb has essentially "wiped away Starbuck's year-to-date stock losses," per CNN. (More Starbucks stories.)
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