Saturday, June 22, 2024

Starbucks founder Howard Schultz cuts his last official ties to the company and takes the honorary role of ‘chairman emeritus’

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Starbucks founder Howard Schultz is stepping down from the company’s board effective Wednesday, the company said. 

Schultz, who bought Starbucks from its original owners in 1987, built the company into a global coffee powerhouse with more than 36,000 locations in countries from the US to Japan. He also positioned the chain as a “third place” between home and work where guests could linger and sip on espresso.

The 70-year-old chairman emeritus served as chief executive officer three times, coming back twice to steer the company after it faltered under his successors. Last year, he picked and trained seasoned executive Laxman Narasimhan, 56, as the first outside CEO to lead Starbucks.

Also Wednesday, the company appointed Wei Zhang, formerly a senior adviser to Alibaba Group, as a director starting Oct. 1. In an earlier role, Zhang led the Chinese conglomerate’s international business and media strategy. China, Starbucks’ second-largest market, is crucial to its growth prospects.

In his most recent stint as CEO, Schultz led a company much different than the one he founded. These days, 75% of drinks sold by Starbucks are cold, and customers are increasingly ordering beverages to go on its app and at drive-thrus. Guests are also customizing already handcrafted drinks even more. That led to bottlenecks at stores, prompting the executive to devise a plan to streamline operations through a slew of equipment upgrades.

Schultz also contended with a unionization campaign at cafés as employees demanded better wages and hours. Judges and prosecutors have accused the company of violating labor laws, which Schultz denied at a hearing before Congress earlier this year shortly after departing as CEO.

The company’s shares fell less than 1% after the close of trading in New York. The stock fell 2.3% this year through Wednesday’s close, while the S&P 500 restaurants index rose 7%.

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