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Starbucks CEO Schultz Stepping Aside to Focus on Ultra-Premium Concept

Starbucks Johnson & Schultz
Left-right: Kevin Johnson, Howard Schultz (Starbucks photo)

Starbucks Corporation (NASDAQ: SBUX) announced on Thursday that effective April 3, 2017, Howard Schultz will vacate his CEO position and be appointed executive chairman. He will continue in his present position as chairman of the board. 

He will shift his focus to innovation, design and development of the Starbucks Reserve Roasteries around the world, expansion of the Starbucks Reserve retail store format and the company’s social impact initiatives. The Seattle Roastery opened two years ago. Coffee at ultra-premium Starbucks Reserve restaurants will be pricier than at other Starbucks locations.

Said Schultz, “You may recall that it was three years ago that I shared with you what I sensed were the early signs of a seismic shift in consumer behavior – away from bricks-and-mortar and towards mobile and online retailing. Today, that shift has taken firm hold around the world, both disrupting and redefining retailing and significantly reducing the consumer foot-traffic that traditional retailers have relied on for decades. …I also shared with you the view that the U.S. was over-retailed. To survive – let alone succeed – traditional bricks-and-mortar retailers would have to evolve their physical spaces into relevant customer destinations, as Starbucks stores have been for the last 40 years through the environments we create and the beverages and foods we serve – and create premiumized, experiential consumer venues.

“That view is what inspired development of the Starbucks Roastery and Reserve brand. …I am personally as passionate about developing the Reserve brand, and opening more Roasteries, as I was about opening our first espresso bar more than 30 years ago in Seattle.”

Schultz’s replacement will be Kevin Johnson, presently president and chief operating officer and a 7-year member of the Starbucks board of directors. He will continue as president and assume the role of CEO, also effective April 3, 2017.

Johnson's career spans 33 years in the technology industry, which included a 16-year career at Microsoft and a 5-year tour as CEO of Juniper Networks. At Microsoft he led worldwide sales and marketing and became the president of the Platforms Division. In 2008 he was appointed to the National Security Telecommunication Advisory Committee where he served Presidents George W. Bush and Barack Obama. He joined the Starbucks board in 2009 and the management team in 2015.

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