• Wed. Sep 28th, 2022

Starbucks appoints head of Lysol maker as new CEO

ByRandall B. Phelps

Sep 1, 2022

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Starbucks Corp on Thursday named Laxman Narasimhan as its next chief executive, choosing an executive credited with revitalizing disinfectant maker Lysol to undertake the “reinvention” of the world’s largest coffeehouse chain.

Narasimhan was CEO of Reckitt, which also makes Durex condoms, Enfamil infant formula and Mucinex cold syrup. He announced his departure from the role earlier today and shares of FTSE-listed Reckitt fell 4%.

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Starbucks faces turbulent times. More than 200 of its U.S. stores unionized in about a year, and workers are demanding better benefits and wages at a time of high inflation. Additionally, the company is reworking its business model, focusing on cafes that encouraged long visits to mobile pickup and delivery.

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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 wellbeing and customer experience and store reinvention.

Until then, interim CEO Howard Schultz will continue to lead the company.

“He is a strategic and transformational leader with a deep experience 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 weather an infant formula crisis in the United States.

The 55-year-old, who previously worked at PepsiCo, has been applauded by Reckitt investors for his management style after helping revitalize the business after a sales slump.

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“He took a very balanced approach to strategy…he didn’t go all out – he took a very systematic approach to getting it right,” said Ashish Sinha, portfolio manager at shareholder Gabelli. by Reckitt.

Starbucks said Narasimhan will spend the period between October and April with Schultz and the management team, spending time as a barista, meeting with employees and visiting manufacturing plants and coffee farms during the transition period.

Shares of the coffee chain, down nearly 27% this year, edged higher to $85.70 after the bell. They’ve fallen 24% since Schultz’s return as interim CEO. (Reporting by Siddharth Cavale in New York and Rithika Krishna in Bengaluru; Editing by Shounak Dasgupta and David Gregorio)

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