Starbucks CEO Announces Retirement! Howard Schultz Returns as CEO

Anyone who knows Starbucks knows the name Howard Schultz. Yesterday, this veteran, long out of the spotlight, announced his return: he will temporarily take over as Chief Executive Officer starting April 4, 2022, until a new successor is chosen.

The pandemic hit the food and beverage industry hard, and Starbucks' stock price sank along with it. During those years, outgoing CEO Kevin Johnson drew on his technology-company background to push Starbucks further into the digital age while shifting more business toward drive-through and delivery. The company's performance steadily recovered, and while many restaurants struggled, Starbucks' sales stayed strong. By spring 2021, Starbucks announced that its U.S. coffee sales business had fully rebounded.

With sales back on solid footing, Kevin Johnson had already signaled to the board that he was weighing retirement. Then yesterday (March 16), just hours before Starbucks' annual shareholder meeting, the company's official website published an announcement on the leadership transition: Johnson would step down as CEO and retire.

Until a suitable successor is found, former CEO Howard Schultz — often called the "father of Starbucks" — will return as interim CEO. For this stint, Schultz will symbolically accept a base salary of $1, though he will be entitled to participate in Starbucks' employee welfare plan.

At that day's shareholder meeting, the Chairman of the Board affirmed that Schultz is eminently qualified to serve as interim CEO, and thanked Johnson for steering Starbucks through the historic challenges of the COVID-19 pandemic.

Howard Schultz's Contributions to Starbucks

Starbucks' success owes an enormous debt to Howard Schultz. Though he didn't found the company, he gave it its "second life." Starbucks was founded in 1971 and hit a financial crisis in the late 1980s, at which point the founders turned to Schultz for help.

In 1987, Schultz acquired the company's retail business from the original founders for $3.8 million and became Starbucks' first CEO. At the time, Starbucks was just a small coffee brand with 11 stores and a little over 100 employees in the United States.

Within four years of the acquisition, Schultz had taken the company global — a staggering pace for the era. Alongside that explosive growth, Starbucks went public under his leadership. But rapid expansion also left it exposed: the 1997 financial crisis hit the company hard, though it ultimately pulled through.

Once the crisis was behind it, Schultz stepped down as Starbucks President and CEO in 2000, moving to the Chairman's seat. Years later, when management troubles demanded his return, he took on the Chairman and CEO roles simultaneously in 2008. It wasn't until 2017, when Kevin Johnson — by then seven years on Starbucks' board — took over as CEO, that Schultz announced his retirement in 2018.

Between 1987 and 2018 — more than 21 years — Schultz led Starbucks from an 11-store shop to a publicly traded giant with over 28,000 stores across 77 countries. The record speaks for itself.

The Challenges Facing Schultz's Return

As Kevin Johnson's retirement approached in 2022 without a successor in place, Schultz was asked back. His "comeback," however, isn't just about future strategy — he inherits a string of recent headaches.

In China, two years of rapid store expansion have brought cost and sales pressure, along with reports last year of some stores using expired ingredients and, this year, an incident in which police were asked to leave a store — all of which have weighed on the brand in the Chinese market.

In the United States, staff shortages have sparked employee unrest, and the company failed to block union election vote counting. So far, workers at 6 U.S. stores have voted to unionize, with more than 100 store petitions still pending. If these votes are confirmed, Starbucks will be legally obligated to negotiate with unions over working conditions at those stores.

Michael Halen, senior restaurant industry analyst at Bloomberg Intelligence, put it this way: "Before finding a suitable candidate for the next CEO, Howard Schultz is the right person to lead the company through these challenges."

The Future of Starbucks

That verdict makes it clear: for now, only this veteran has the standing to turn Starbucks around. Schultz himself has said nothing publicly about his longer-term plans. All that remains is to wait and see what he does with the company this time.

Image source: Internet

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