Starbucks CEO Brian Niccol Shakes Up Executive Ladder: But Retail Remains Skeptical

Starbucks Corp (SBUX) CEO Brian Niccol has reportedly shuffled executive ranks very early in his stint with the coffee chain. According to a Bloomberg report, Niccol has done away with  the role of global chief merchant and product officer held by Lyne Castonguay.

The role was created by the previous CEO Laxman Narasimhan, the report said. The new chief’s moves come in the wake of the firm trying to ramp-up growth amidst a slump in sales.

Furthermore, Starbucks’ North America president Sara Trilling, who focuses on store growth and retail workers, will now report directly to Niccol after the CEO removed a layer of management between them.

A Starbucks spokesperson reportedly said the firm seeks to deliver a compelling and consistent brand experience across every customer touchpoint. “This is best done when there is clear accountability under a single leader – a global chief brand officer.”

The report also said that Molly Liu — who was named co-CEO alongside Belinda Wong last year — has been appointed as the sole leader of the China business. Wong will stay on as chair, heading innovation and the development strategy. The report cited Starbucks saying the change was part of a planned leadership transition.

Despite the management reshuffle, retail sentiment on Stocktwits moved deep into the ‘bearish’ territory (29/100).

Last month, Niccol said in an open letter that the coffee chain will initially focus on four areas which will have the biggest impact. The new CEO acknowledged that in some places — especially in the U.S. — the firm isn’t always delivering.

“It can feel transactional, menus can feel overwhelming, product is inconsistent, the wait too long or the hand-off too hectic. These moments are opportunities for us to do better,” he had said.

Recently, Jefferies analyst Andy Barish downgraded the stock to ‘Underperform’ from ‘Hold’ while reducing the price target to $76 from $80.

Stocktwits users are unconvinced by the latest slew of announcements by the coffee chain and appear to be on a wait and watch mode. One user believes the stock’s valuation is quite high at the current juncture.

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