Starbucks picks Laxman Narasimhan as a new CEO
The world’s biggest coffee chain, Starbucks Corp, announced, on Thursday, that it will choose Laxman Narasimhan as its next chief executive officer, choosing an executive credited with revitalizing the maker of Lysol disinfectants to lead the company as it embarks on a “reinvention”.
In addition to Durex condoms, Enfamil baby formula, and Mucinex cold syrup, Mr Narasimhan oversaw operation of Reckitt, which also manufactures Durex condoms, Durex condoms, and Durex condoms. His departure was announced earlier in the day, and Reckitt’s shares fell 4% on the news.
It is no secret that Starbucks is facing a challenging period right now. More than 200 of its US stores have joined the union in the past year, as workers have pushed for better wages and workplace benefits in the face of rising inflation.
As a result, the company is reworking its business model from focusing on cafes that encouraged long visits to mobile pickup and delivery, which is causing higher ingredients and labor costs to rise. Also, COVID restrictions in China have slowed the US coffee chain’s business in one of its largest overseas markets.
It is expected that Mr. Narasimhan will join Starbucks in October, but will assume the helm of the company in April of 2023, after learning about the company for a few months. As part of Starbucks’ “Reinvention” plan, barista wages will be increased, employee welfare will be improved, customer experience will be enhanced, and stores will be reimagined.
At the same time, interim CEO Howard Schultz, who took over the reins of the company for a third time in April after Kevin Johnson retired, will continue to lead the company until that time comes.
Schultz, in a letter he wrote to employees welcoming Mr Narasimhan to the company, described him as a strategic and transformational leader with deep experience in creating powerful consumer brands.
Laxman Narasimhan Before Starbucks
In September 2019, Mr Narasimhan became Reckitt’s new CEO, making him the first external candidate to take the reins of Reckitt since the company was formed in 1999.
During his tenure at the company, he led it to success during a pandemic, which helped boost sales of its health and hygiene products. More recently, he guided it through a baby formula crisis that happened in the United States, which resulted in a rise in its annual forecast.
It was his management style that was admired by Reckitt investors after he helped revitalize the company after a sales slump in 2006 and had previously held the position of global chief commercial officer at PepsiCo.
During his time at Reckitt, Ashish Sinha, portfolio manager at Reckitt shareholder Gabelli, was quoted as saying, “He took a very balanced approach to strategy. He didn’t go in all guns blazing, but he took a very systematic approach to get things right.”.
During the transition period, Mr Narasimhan will be spending time in the company with Schultz, Schultz’s management team, meeting employees, spending time with manufacturing plants, and visiting coffee farms during his time here.
The fact that Starbucks chose a successor outside of the discretionary sector may surprise us, but as a global leader of a public multinational corporation with a background in beverages at PepsiCo and a global perspective, Mr Narasimhan’s global perspective will serve Starbucks well throughout the next chapter, according to Cowen analyst Andrew Charles, according to his note.