Starbucks' new chief executive got a lukewarm reception from investors today as they knocked 1.4% off the coffee chain's share price.
Seattle-based Starbucks announced yesterday that it had nabbed Reckitt Benckiser Group PLC's (LSE:RKT, ETR:3RB) Laxman Narasimhan to be its new chief executive.
Narasimhan had earlier made a shock and sudden exit as CEO of the UK consumer goods business that owns brands such as Dettol, Durex and Cilit Bang, citing a want to return to the US.
A statement issued by the coffee chain said the 55-year-old will join on October 1, working closely with interim boss Howard Schultz, before assuming the chief executive position on April 1 2023.
During the transitional period, Narasimhan will be “fully immersed in the company, spending time with Schultz and the management team, partners and customers.”
“His deep, hands-on experience driving strategic transformations at global consumer-facing businesses makes him the ideal choice to accelerate Starbucks' growth and capture the opportunities ahead of us,” said Mellody Hobson, chair.
Narasimhan has nearly 30 years of experience in leading consumer-facing brands, most recently as CEO of Reckitt, a position he held for the last three years.
During his time there, he guided the FTSE 100 company through Covid, as well as a failed US$18bn acquisition of Mead Johnson and a US$1.4bn fine for legacy issues.
According to Russ Mould, an investment director at AJ Bell, Narasimhan will likely come in and follow on the work from Schulz.
“He (Schulz) will presumably be looking to his successor to carry on his work, with the view that these strategies will keep Starbucks’ competitive and attractive staff and customers alike, at a time when there is no shortage of competition.”
“Narasimhan will have to deliver products that people want, in a format that agrees with them and at a price point they feel is acceptable and represents good value.”