Starbucks has tapped an executive who's worked at some of the country's largest retailers as its new chief financial officer to help the coffee chain turn around its business and increase its store count.
The Seattle-based company said Tuesday that Cathy Smith has been hired as its new top finance executive. Smith, who served in the same position at luxury department store chain Nordstrom for the past two years, will replace Rachel Ruggeri, who had worked at Starbucks for nearly 20 years.
Smith starts at Starbucks next month and Ruggeri will help with the transition, Starbucks said. Nordstrom said in its earnings release Tuesday that it "has initiated a comprehensive search for a new CFO with the assistance of a leading search firm."
"Cathy brings incredible knowledge and extensive experience in retail, global operations, and turnaround success," Starbucks Chairman and CEO Brian Niccol said in a letter to employees, a group the company refers to as partners. She’s held CFO roles at Nordstrom, Target, and Walmart International."
The "Back to Starbucks" plan calls for a focus on core coffee products, better pricing and faster service, and a return to coffee culture at the chain's locations. It comes as Starbucks is in the early stages of a turnaround plan aimed at boosting declining sales by bringing back customer perks, such as free refills, condiment bars and drinks served in ceramic mugs.
As part of the plan, Niccol has said Starbucks could double its number of U.S. stores. Its store count grew 7% to just over 17,000 locations in the most recent quarter that ended Dec. 29 compared to the same period last year, the company said.
Last month, Starbucks said it plans to eliminate 1,100 corporate jobs worldwide as the coffee chain joins firms across several industries trimming their workforces, among other cost reducing moves.
As for Smith, she has more than 30 years of experience working for large corporations and retailers. She joined Nordstrom as CFO in 2023 at which point CEO Erik Nordstrom admired her experience with high-caliber and complex retail operations.
Smith, who will report to CEO Niccol and also served as an executive vice president, will be paid an annual salary of $925,000 and receive a sign-on bonus of $5 million that will be paid in two installments "in consideration for cash incentive opportunities" that Smith is giving up by leaving her current employer, equity that would have vested over the next 12 years, according to her offer letter that is included in a filing Starbucks made Tuesday with the U.S. Securities and Exchange Commission.
In addition, Smith "will receive a grant of equity under the Starbucks Corporation 2005 Long-Term Equity Incentive Plan with a target value of $6,400,000 (the “Replacement Grant”) in consideration of equity that you are forfeiting by leaving your current employer," Starbuck said in the offer letter.
In his letter to Starbucks employees, Niccol highlighted Smith's "turnaround success" at other companies. She also has served as the top financial officer at Gamestop, Raytheon, Centex, Textron, and other public companies.
As Smith winds down in her current position, CEO Nordstrom said in a statement that Smith "has been instrumental in strengthening our financial resilience and flexibility" and that the retailer is "fortunate to have a strong financial leadership team to take on additional responsibilities and help ensure a smooth transition during our search."
This story has been updated to include comment from Nordstrom.