Starbucks said Ken Lombard, the chief of the entertainment division, has left the company as it restructures the unit that sells books and...
Starbucks said Ken Lombard, the chief of the entertainment division, has left the company as it restructures the unit that sells books and CDs in its cafes.
Day-to-day management of its Hear Music record label will be turned over to Concord Music Group, the company said Thursday. It said it will still work with the William Morris Agency to find books to sell in its coffee shops.
Starbucks has added CDs by artists such as Paul McCartney, DVDs and books including Mitch Albom’s “For One More Day” to boost sales beyond lattes and espressos and keep customers in stores longer.
The entertainment division’s changes are part of Chief Executive Officer Howard Schultz’s attempt to revive flagging revenue as consumers cut spending.
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Lombard, 53, joined Starbucks in 2004. He left to “pursue other business interests,” Starbucks said.
Chief Technology Officer Chris Bruzzo was promoted to senior vice president and will oversee the entertainment unit.
Schultz, 54, returned to the CEO post in January after two quarters of customer declines erased the company’s stock market value.
He has closed stores, retrained employees to make espressos and began selling a milder blend of coffee called Pike Place Roast, named for its first store.
“As part of our ongoing transformation, we are committed to examining all aspects of our business that are not directly related to our core,” Schultz said in Thursday.
Music sold at the world’s largest chain of coffee shops has won eight Grammy awards, and the chain has had three books top The New York Times best-seller list, the company said.
In March 2007 Starbucks and Concord formed the Hear Music label, named after the music stores Starbucks has in some cafes, to focus on emerging artists.
In 2006 the company began selling books and hired William Morris to find entertainment projects to distribute. Starbucks has also promoted films such as “Akeelah and the Bee.”
Starbucks on Wednesday forecast its first annual profit decline in eight years on slowing U.S. sales.
Schultz in Wednesday’s statement called the economic environment “the weakest in our company’s history” as gasoline tops $3.50 a gallon and companies cut jobs.
Starbucks tumbled $1.86, or 10 percent, to $15.99 on Thursday, its biggest drop in eight years. The stock has declined 22 percent this year.
The company operated almost 16,000 stores, including 11,000 in the U.S., at the end of 2007.