Starbucks executive Schultz to step aside
LOS ANGELES/NEW YORK, June 5, 2018 (News Wires) - Starbucks Corp Executive Chairman Howard Schultz is stepping away from the coffee chain he built into a global powerhouse, putting management firmly into the hands of Chief Executive Kevin Johnson, who had an office connected to the co-founder’s and regularly turned to Schultz in times of crisis.
Johnson faces a raft of challenges on the horizon. He is facing cooler growth in Starbucks’ dominant U.S. market and intense competition from rivals - ranging from high-end coffee shops to more affordable fast-food chains - as the company undertakes a massive expansion project in China.
While Johnson, a former technology executive, can turn to new Starbucks Chairman Myron Ullman and his decades of retail experience, the news left some investors questioning how the iconic coffee brand will evolve after the June 26 departure of Schultz, who has been a near-constant presence for nearly four decades and crafted the company’s inclusive culture.
“It removes a perceived leadership ‘safety net’ and creates a degree of uncertainty at a time when Starbucks faces a number of challenges,” said BMO Capital Markets analyst Andrew Strelzik.
The announcement also fueled speculation that Schultz, 64, a liberal-leaning executive known for being outspoken on social issues ranging from gay marriage to government gridlock, will make a U.S. presidential bid.
“For two years, I have offered that Schultz will seek the 2020 Democratic presidential nomination. I still believe so,” said Douglas Kass, founder of hedge fund Seabreeze Partners Management Inc, who has a “short” position on Starbucks shares.
Schultz has repeatedly denied that he has political ambitions, but he appeared to be more open to the idea in an interview with CNN last week.
Asked specifically about a U.S. presidential run, Schultz said in a New York Times article on Monday: “I intend to think about a range of options, and that could include public service. But I’m a long way from making any decisions about the future.”
Starbucks declined to make Schultz or other Starbucks executives and board members available for comment.