Coffee giant Starbucks Corp on Thursday said that the company has appointed its new Indian-origin Chief Executive Officer (CEO) Laxman Narasimhan. He will join Starbucks on October 1, after replacing Howard Schultz who will continue as interim chief until April 2023.
Narasimhan (55) was CEO of Reckitt, has served as chief executive of Lysol and Enfamil baby formula, UK-based Reckitt Benckiser Group PLC. He announced his departure from that post earlier in the day.
According to ANI, Mellody Hobson, Starbucks chairwoman said that the company believes it has found an exceptional individual to be its next CEO as Narasimhan is a tested leader, according to The Wall Street Journal.
Narasimhan will join Starbucks in October but will take the helm in April 2023, after spending a few months learning about the company and its 'reinvention' plan, which includes paying better wages for baristas, improving employee welfare, and customer experience and re-imagining stores.
Until then, interim-CEO Howard Schultz, who took back the reins of the company for the third time in April after Kevin Johnson retired, will continue to lead the company.
US-headquartered Starbucks faces a turbulent period. Over 200 of its stores in the US have unionised in the past year, with workers pushing for better benefits and wages at a time of surging inflation, according to Reuters.
The company is also reworking its business model from a focus on cafes that encouraged long visits to mobile pickup and delivery, while facing higher costs for ingredients and labour. Also, Covid curbs in China have slowed the US coffee chain's business in one of its biggest overseas markets.
Schultz, in a letter to employees welcoming Narasimhan, said, "He is a strategic and transformational leader with deep experience in building powerful consumer brands."
In September 2019, Narasimhan joined Reckitt and was the first external candidate to take the helm at Reckitt since it was formed in 1999. He led the firm through the pandemic, which boosted sales of its health and hygiene products, and more recently navigated a baby formula crisis in the US, culminating in a raise in its annual forecast earlier this year.
Narasimhan previously worked at PepsiCo as its global chief commercial officer. In Reckitt, he gained plaudits from investors for his management style after helping revitalise the company after a sales slowdown.
"He took a very balanced approach to strategy ... he didn't go in all guns blazing - he took a very systematic approach to get things right," said Ashish Sinha, portfolio manager at Reckitt shareholder Gabelli.
"While we are surprised Starbucks chose a successor outside the discretionary sector, we are optimistic Mr. Narasimhan's global perspectives as a CEO of a public multinational corporation and background in beverages at PepsiCo will serve Starbucks well into the next chapter," Cowen analyst Andrew Charles wrote in a note.