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1 month ago
9
Starbucks has announced that Chipotle's CEO Brian Niccol will become its new chief executive in a major shake-up.
The coffee chain has faced pressure from activist investor Elliott Investment Management to improve its performance and stock price.
Shares of Starbucks shut up 20 percent in early trading following the news, while Chipotle's stock sunk more than 9 percent.
Chipotle's CEO Brian Niccol (pictured) will become the new chief executive of Starbucks
The Seattle-based coffee chain is facing down pressure from activist investors
Niccol will start in his new role on September 9 replacing current CEO Laxman Narasimhan just a year and half after he took on the role.
Starbucks has been in negotiations with Elliott Investment Management for weeks over the company's slowing sales and operating issues.
Just last week another activist investor, Starboard Value, took a stake in the Seattle-based company, according to the Wall Street Journal.
Starbucks reported disappointing results in its latest earnings report, which showed a 2 percent fall in same-store sales.
Profit fell 7.5 percent in the second quarter, with the company blaming higher wages for US staff offsetting its raised prices.
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