Starbucks taps head of Lysol maker as new CEO
2022.09.02 01:33
FILE PHOTO: A Starbucks store is seen in New York January 24, 2014. REUTERS/Eric Thayer
(Reuters) -Starbucks Corp on Thursday named Laxman Narasimhan as its next chief executive officer, choosing an executive credited with revitalizing the maker of Lysol disinfectants to undertake “reinvention” of the world’s biggest coffee chain.
Narasimhan was CEO of Reckitt, which also makes Durex condoms, Enfamil baby formula and Mucinex cold syrup. He announced his departure from that post earlier in the day, and FTSE-listed Reckitt’s shares fell 4%.
Starbucks (NASDAQ:SBUX) faces a turbulent period. More than 200 of its U.S. stores have unionized in about a year, and workers demanding better benefits and wages at a time of surging inflation. Also, the company is reworking its business model from a focus on cafes that encouraged long visits to mobile pickup and delivery.
Narasimhan will join Starbucks in October but will take the helm in April, after spending a few months learning about Starbucks 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 will continue to lead the company.
“He is a strategic and transformational leader with deep experience in building powerful consumer brands,” Schultz said in a letter to employees welcoming Narasimhan.
BALANCED APPROACH Narasimhan joined Reckitt in September 2019 and he led the company through the pandemic and helped navigate a baby formula crisis in the United States.
The 55-year old, who previously worked at PepsiCo (NASDAQ:PEP), gained plaudits from Reckitt investors for his management style after helping revitalize the company after a sales slump.
“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.
Starbucks said Narasimhan will spend the period between October and April with Schultz and the management team, spending time as a barista, meeting employees and visiting manufacturing plants and coffee farms during the transition period.
The coffee chain’s shares, down nearly 27% this year, rose marginally to $85.70 after the bell. They have fallen 24% since Schultz’s return as interim CEO.
