"Niccol was expected to be a turnaround artist due to his track record at Taco Bell and Chipotle. His magic at Starbucks has been a line of statements primarily about how Starbucks might return to its roots as a community coffeehouse where baristas are friendly and well-dressed. When people order, their orders will come fast. The baristas will remember people's names."
"He dumped Starbucks operations in China, which was supposed to be its fastest-growing market and eventually, perhaps, its largest. Starbucks sold 40% of its China operations for $4 billion, plus brand licensing and some upside. The buyer was Boyu Capital, which, while local, does not appear to have deep roots in the coffee shop business. It is rare for a company to walk away from such a strategic asset, even if it faces a long repair job."
Starbucks' share price has declined from a $117 peak in March to $87, signaling investor dissatisfaction. Multiple chief executives have cycled through since 2021, including Kevin Johnson, Howard Schultz, Laxman Narasimhan, and Brian Niccol. Niccol promoted a 'Back to Starbucks' turnaround emphasizing community coffeehouse roots, faster service, and attentive baristas. Niccol sold 40% of Starbucks' China operations to Boyu Capital for $4 billion, significantly reducing exposure to a once-critical growth market. Annual revenue rose 3% to $37.2 billion while earnings fell from $3.31 to $1.63 per share. Starbucks workers plan strikes in 40 cities, increasing operational and reputational risk.
Read at 24/7 Wall St.
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