Former Starbucks CEO Howard Schultz will take the reins of the coffee chain for the third time after current CEO Kevin Johnson said on Wednesday that he was retiring.
Johnson, 61, first told the company’s board that he wanted to retire about a year ago, according to a company statement.
“I feel this is a natural bookend to my 13 years with the company. As I make this transition, we are very fortunate to have a founder who is able to step in on an interim basis, giving the board time to further explore potential candidates and make the right long-term succession decision for the company,” Johnson said in the statement.
Starbucks expects to have a new full-time CEO by the fall, according to the statement, and Schultz will step in as interim CEO until then.
The 68-year-old Schultz joined Starbucks in the early 1980s as director of retail operations and marketing when it had just a handful of locations, including its original location at Pike Place Market in Seattle. He then left briefly to start his own Italian-style café called Il Giornale in 1985. Two years later, Schultz bought Starbucks and became CEO. Under his tenure, the company grew from 11 stores to more than 28,000 globally while its shares rose 21,000% after going public in 1992, according to CNBC.
In 2000, Schultz stepped down from his first run as CEO but remained chairman. In 2008, as the company struggled financially during the recession, he returned as CEO.
During that second stint, Schultz closed underperforming stores and installed his former leadership team. In a letter from that time, Schultz reflected on the company’s recent missteps.
“If we take an honest look at Starbucks today, then we know that we are emerging from a period in which we invested in infrastructure ahead of the growth curve,” Schultz wrote. “Although necessary, it led to bureaucracy. We will now shift our emphasis back onto customer-facing initiatives, better aligning our back-end costs with our business model.”
He stepped down again in 2017 and continued as chairman through 2018.
As Schultz returns to Starbucks in an interim capacity, the coffee chain is facing new challenges. It was among the first U.S. Companies to feel the effects of the pandemic when China implemented lockdowns in early 2020 and the company had to close locations there. Its same-store sales, a metric used to measure the performance of existing stores, fell in 2020 for the first time in more than a decade.
As it sped up plans to close some locations and focus on its drive-thru operations, Starbucks’ sales rebounded. By 2021, the company said its sales made a “full recovery” from pandemic-related closures.
At the same time, Starbucks is facing an unprecedented unionization drive in its U.S. Stores. After employees in two Buffalo stores voted to unionize in December, several more followed and the company now has at least six unionized locations. More than 130 of Starbucks’ 9,000 stores have petitioned to unionize.
This week, the National Labor Relations Board filed a complaint against Starbucks for allegedly penalizing two Arizona workers for union activity.
Starbucks shares were up 3.86% at $86.26 on Wednesday afternoon following Johnson’s retirement announcement.
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