Starbucks taps head of Lysol maker Reckitt as its new CEO

A Starbucks retailer is seen in New York January 24, 2014. REUTERS/Eric Thayer

NEW YORK, Sept 1 (Reuters) – Starbucks Corp (SBUX.O) on Thursday named Laxman Narasimhan as its subsequent chief government officer, selecting an government credited with revitalizing the maker of Lysol disinfectants to undertake a “reinvention” of the world’s largest espresso chain.

Narasimhan was CEO of Reckitt (RKT.L), which additionally makes Durex condoms, Enfamil child formulation and Mucinex chilly syrup. He introduced his departure from that publish earlier within the day, and FTSE-listed Reckitt’s shares fell 4%. learn extra

Starbucks faces a turbulent interval. Greater than 200 of its U.S. shops have unionized prior to now yr, with staff pushing for higher advantages and wages at a time of surging inflation.

The corporate can be remodeling its enterprise mannequin from a concentrate on cafes that inspired lengthy visits to cellular pickup and supply, whereas dealing with larger prices for components and labor. Additionally, COVID restrictions in China have slowed the U.S. espresso chain’s enterprise in certainly one of its largest abroad markets.

Narasimhan will be part of Starbucks in October however will take the helm in April 2023, after spending just a few months studying concerning the firm and its “Reinvention” plan, which incorporates paying higher wages for baristas, enhancing worker welfare and buyer expertise and re-imagining shops.

Till then, interim-CEO Howard Schultz, who took again the reins of the corporate for the third time in April after Kevin Johnson retired, will proceed to guide the corporate.

“He’s a strategic and transformational chief with deep expertise in constructing highly effective shopper manufacturers,” Schultz mentioned in a letter to workers welcoming Narasimhan.

BALANCED APPROACH

Narasimhan joined Reckitt in September 2019 and was the primary exterior candidate to take the helm at Reckitt because it was fashioned in 1999.

He led the corporate via the pandemic, which boosted gross sales of its well being and hygiene merchandise, and extra just lately navigated a child formulation disaster in the US, culminating in a increase in its annual forecast earlier this yr. learn extra

The 55-year outdated, who beforehand labored at PepsiCo (PEP.O) as its world chief business officer, gained plaudits from Reckitt buyers for his administration fashion after serving to revitalize the corporate after a gross sales hunch.

“He took a really balanced method to technique … he did not go in all weapons blazing – he took a really systematic method to get issues proper,” mentioned Ashish Sinha, portfolio supervisor at Reckitt shareholder Gabelli.

Starbucks mentioned Narasimhan will spend his time with Schultz and the administration group, spending time as a barista, assembly workers and visiting manufacturing vegetation and low farms through the transition interval. learn extra

“Whereas we’re stunned Starbucks selected a successor exterior the discretionary sector, we’re optimistic Mr. Narasimhan’s world views as a CEO of a public multinational company and background in drinks at PepsiCo will serve Starbucks nicely into the subsequent chapter,” Cowen analyst Andrew Charles wrote in a word.

The espresso chain’s shares have been barely modified in after-hours commerce, gaining lower than 1%. They’re down 24% since Schultz’s return as interim CEO.

Reporting by Siddharth Cavale in New York and Rithika Krishna in Bengaluru; Modifying by David Gregorio and Stephen Coates

: .