Starbucks chief executive Howard Schultz will step aside as CEO but remain with the company as chairman, the coffee giant said Thursday in a surprise announcement that sent the share price down after hours.
Schultz, who helped grow Starbucks from a sleepy chain in Seattle to an iconic global brand, will stay on as executive chairman and chairman of the board. The change is effective April 3.
He will hand the reins to president and chief operating officer Kevin Johnson, who was tapped as number two at the company in 2015 and has been a Starbucks board member since 2009.
The move comes as the firm faces an increasingly crowded market for higher-quality retail coffee shops and seeks to bolster foot traffic. Schultz will devote his time to developing high-end coffee shops around the world known as Starbucks Reserve Roasteries, the company said in a statement.
Schultz, 63, told The Wall Street Journal on Thursday that the new initiative would help maintain in-person sales as consumers increasingly move to online shopping rather than visiting malls, where many Starbucks outlets are located.
“I don’t have any time horizon that would limit my engagement in the company,” Schultz said. “This gives me the entrepreneurial freedom to do what I think I do best.”
Incoming CEO Johnson is a tech industry veteran, having spent 16 years at Microsoft and five as CEO of the networking equipment company Juniper Networks.
Prior to the announcement, the company’s share price closed up 0.9 percent in New York but fell 4 percent lower in after-hours trading at 2200 GMT. The company announced in October that it planned to double the number of its stores in China over five years.