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Chipotle Taps Taco Bell Chief Brian Niccol As Its Next CEO

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For years, Chipotle was considered an "upscale" version of Taco Bell. But now, in the wake of food safety scandals that have rocked its reputation and once-sterling sales, the fast-casual pioneer is turning to the head of its fast-food peer to replace its outgoing chief executive, Steve Ells.

Chipotle announced Tuesday afternoon that effective March 5, Brian Niccol will take the reins from Ells and become Chipotle's next CEO. Niccol is currently the chief executive of Taco Bell, a position he has held since 2015.

"Brian's expertise in digital technologies, restaurant operations and branding make him a perfect fit for Chipotle as we seek to enhance our customer experience, drive sales growth and make our brand more relevant," Ells said in a statement Tuesday afternoon. "The board is confident that Brian's passion and skill set ideally position him to make the bold moves needed to improve operations and take the company to the next level, all while remaining true to our purpose and the values that are essential to our customers." 

Chipotle is in somewhat dire need of a sustained turnaround. The first reports of foodborne illness (specifically, norovirus and e coli) outbreaks linked to Chipotle food came in the summer of 2015 and continued into the fall. In 2016, the company's traffic, sales and stock plummeted as skittish customers abandoned the burrito giant. By early 2017, things were starting to look up  -- not only were quarter-over-quarter comparisons getting easier, but customers were slowly returning and Wall Street data shops were beginning to bet on a rebound. But then, in July 2017, Chipotle's long-awaited turnaround hit a snag: it was forced to temporarily close a restaurant in Virginia after 13 customers reported getting sick with symptoms consistent with norovirus. By the end of its third fiscal quarter, its comparable store sales had sunk to 1% (from 8.1% in the second quarter of 2017 and 17.8% in the first); its fourth quarter comp sales, reported last week, came in at just 0.9% growth.

Ells announced his intention to step down as Chipotle chief executive in November. At the time, he and the members of the executive search committee said they wanted to find a "leader with demonstrated turnaround expertise to help address the challenges facing the company."

In Niccol, Chipotle is getting someone who has overseen one of the crown jewels of the Yum! Brands portfolio; in fiscal year 2017, Taco Bell's same-store sales grew 4%, outpacing Pizza Hut and KFC. In the news release announcing his hiring, Chipotle said that Niccol "successfully repositioned Taco Bell as a lifestyle brand" and credited him with the chain's success in breakfast and on social media.

Before serving as Taco Bell's chief executive, Niccol held a variety of roles at Pizza Hut -- including that of vice president of strategy and chief marketing officer.

"I am very excited to be joining Chipotle at this pivotal time in its history," Niccol said in a statement Tuesday. "At Chipotle's core is delicious food, which I will look to pair up with consistently great customer experiences. I will also focus on dialing up Chipotle's cultural relevance through innovation in menu and digital communications. This will attract customers, return the brand to growth, deliver value for shareholders and create opportunities for employees."

Wall Street appears to like the move, with investors sending Chipotle shares for an 11.7% gain in after-hours trading Tuesday.