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US financier Mellody Hobson is stepping down from the board of Starbucks months after leading an effort to replace its former chief executive during a tumultuous time for the world’s largest coffee shop chain.
Hobson became a director of Starbucks in 2005 and is close to its pioneering former leader Howard Schultz. She announced her resignation from the board in a letter on Thursday. Starbucks is expected to announce its next slate of director nominees this month.
As board chair last summer, she engineered the defenestration of chief executive Laxman Narasimhan, replacing him with Brian Niccol of Chipotle Mexican Grill.
“With Brian Niccol firmly at the helm (after a dogged pursuit!), I am confident Starbucks is in excellent hands,” Hobson wrote. “For this reason, I now feel comfortable stepping away from the board and do not plan to stand for re-election.”
Hobson, 55, is one of the most prominent Black women in corporate America. She is co-chief executive of Ariel Investments, the Chicago-based fund manager, and also serves on the board of JPMorgan Chase, the largest US bank by assets. Hobson holds Starbucks shares worth more than $60mn, according to regulatory data, and said in her resignation letter that she would “remain a steadfast investor.”
During her two-decade tenure at Starbucks the company was admired for its stratospheric growth and attention to social and environmental responsibility.
But sales at the company’s 40,000 stores have faltered in the past year. Customers, stretched by inflation, have balked at its relatively high-priced drinks. Some have boycotted the American brand over the war in Gaza.
Management is also in the middle of acrimonious contract talks with Workers United, a labour union that organised its first Starbucks café in 2021.
Niccol, who became board chair when he joined in September, is in the early stages of a turnaround plan. The company is set to roll out changes at North American stores on January 27, including free refills in ceramic mugs and a requirement that visitors make a purchase if they want to lounge inside.
Starbucks’ first-quarter results are expected to show a 5 per cent decline in same-store sales, according to Visible Alpha. In a letter to staff, Niccol said Hobson “embodies the best of Starbucks” and was a “passionate supporter” of the company’s baristas.
