Starbucks stirs its cup

08-01-2008

Starbucks stirs its cup
Coffee chain Starbucks has turned to the founder of its success to revive its flagging fortunes.

Howard Schultz, who first joined the Seattle company 25 years ago, has taken on the chief executive role in addition to his capacity as chairman.

It means Jim Donald, who arrived at the chain in 2002, pays the price for declining share prices and leaves the firm.

Starbucks says the changes are aimed at "driving shareholder value by refocusing the Company on providing customers with the distinctive Starbucks experience and building on Starbucks' legacy of innovation".

Shares in the company, which has stores in 43 countries, have almost halved in price since this time last year but rose by close to nine per cent following the management shakeup announcement.

Mr Schultz, who was tasked with ensuring the company's global expansion as chairman, will now take on responsibility for "the overall strategic direction of the company, with a predominant focus on everything that touches the customer".

In a letter to customers, Mr Schultz pledged a return to the "distinctive Starbucks experience" and an upturn in the chain's fortunes.

"We have enormous opportunity and exciting plans in place to make the Starbucks experience as good as it has ever been and even better," he wrote.

"In the coming months, you will see this come to life in the way our stores look, in the way our people serve you, in the new beverages and products we will offer. That is my promise to you. Everyone at Starbucks looks forward to sharing these initiatives with you."

Craig Weatherup, chairman of the Starbucks board's nominating and corporate governance committee, called the new chief the "architect of the Starbucks brand and the visionary behind the unique customer experience that is at the heart of this remarkable company’s success".

"Given what the board believes needs to be done, there is no better person to drive change and ensure that Starbucks is positioned to innovate, execute and relentlessly focus the entire organisation on the customer," he added.

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