Troubled burrito chain Chipotle Mexican Grill (CMG) said on Wednesday it is looking for a new CEO to replace co-founder Steve Ells. The news comes less than a year after another major change in the corner suite.
Chipotle, which never recovered meaningfully from a 2015 food safety crisis in which an E. Coli outbreak sickened dozens of customers in 14 states, said that Ells, who co-founded the one-time Wall Street darling in 1993, would remain as executive chairman and gave no timeframe for choosing his successor. Last December, Chipotle announced that then co-CEO Marty Moran would leave the company altogether, ending a seven-year co-CEO setup.
The company, whose shares jumped 4% on the news, has struggled to get back on track, with many customers still hesitant to return to the burrito chain that became a favorite of consumers for its focus on customizable burritos and natural ingredients. Ells himself acknowledged a need for a quicker pace of change at Chipotle.
“It is clear that we need to move faster to make improvements,” Ells said in a statement. “Simply put, we need to execute better to ensure our future success.”
Chipotle’s problems attracted the attention of activist investor Bill Ackman, now a major shareholder, and led to major changes earlier this year to its board.
Ells, who will be on the search committee for his replacement, will focus on hastening innovation in Chipotle’s sourcing and food preparation, including menu innovation, delivery, catering, and expansion of the chain.
Chipotle has struggled to win back customers this year, despite aggressive profit-sapping promotions. Adding to its current travails, Chipotle has grappled with high avocado prices, a series of hurricanes that closed hundreds of locations in late summer, and a national data breach in which hackers stole customer payment data.
Shares were trading at about $300 on Wednesday morning, but were at $742 soon before the E.Coli crisis.