ALBAWABA - Laxman Narasimhan was replaced as chief executive and chair of Starbucks on Tuesday by Brian Niccol, former CEO of Chipotle. This decision came after the coffee chain recorded a fall in same-store sales for two consecutive quarters, while also facing intense demands for a boycott.
After taking over as CEO of Chipotle in March 2018, Niccol was able to supervise a significant turnaround at the restaurant chain, which resulted in a 770 percent gain in the share value throughout his term, according to Fortune. Following the announcement, Chipotle shares dropped by more than 7 percent as of Tuesday afternoon.
Starbucks’ stock fell by more than 22% during Narasimhan's leadership, while the S&P saw an astounding 36% increase in the same period. Nevertheless, a surge on Tuesday almost made up for the stock's annual losses, sending the shares over $90 for the first time since early April.
Investors are optimistic that the new CEO could potentially be able to bring suffering Starbucks back to life, as in light of the announcement, Starbucks shares rose by 20 percent during afternoon trading, putting them on track to have their biggest day since the company's first public offering in 1992, as reported by CNBC.
Starbucks has faced major fiscal difficulties due to its legal action against its workers union over a social media post that expressed support for Palestinians in the ongoing Israeli aggression on Gaza. Additionally, reports about the company's largest private shareholder, Howard Schultz, supporting the Zionism regime, prompting calls for a boycott by many activists.
“I am excited to join Starbucks and grateful for the opportunity to help steward this incredible company, alongside hundreds of thousands of devoted partners,” the new CEO said in a statement. “I am energized by the tremendous potential to drive growth and further enhance the Starbucks experience for our customers and partners, while staying true to our mission and values,” he added.
