Shares in Starbucks fall as investors face new reality with fresh CEO
Shares in coffee giant Starbucks fell by 1.03% to below $56 in early trading on June 5th as a new chapter began at the firm and investors adjusted to a new reality.
The CEO of Starbucks Howard Schultz is set to officially leave the business after 36 years of service.
Schultz, who announced at the end of 2016 that he would be retiring, is to relinquish his seat on the board of directors on June 26th. The announcement back then was enough to put a significant dent in the Starbucks share price, which has struggled greatly over the last year, notching a 9.23% loss.
Schultz’s leadership saw Starbucks grow from 11 stores to over 28,000, while he is also credited with getting the company back on track after a dismal 2008 performance.
The reason for the lack of share price gains is that investors worry that the new CEO Kevin Johnson (another board member) may not offer the same kind of innovative leadership that the company will need to navigate through tougher circumstances in future, as more people move away from the high street in favour of online shopping, meaning less foot traffic in Starbucks outlets.
Schultz, who has been spoken out about both social and political issues, has attracted speculation that he will run for office, potentially as a Democratic presidential candidate in 2020. In a memo to staff he said: “I’ll be thinking about a range of options for myself, from philanthropy to public service, but I’m a long way from knowing what the future holds.”
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