Starbucks CEO gets mixed reviews in second command

By Lisa Baertlein - Analysis

LOS ANGELES (Reuters) - Can Starbucks Corp (SBUX.O: Quote, Profile, Research) Chief Executive Howard Schultz be both a cult leader and a practical turnaround artist?

Wall Street and Main Street are giving Schultz high marks for trying to bring back some of the "cool" lost in the company's mass-market expansion, but many fear he isn't making the tough decisions needed to fix a slowing U.S. business.

"I think management believes Starbucks is still a cult and the company manages it as a cult. It's not. It's just another restaurant that people go to," said Scott Rothbort, president and founder of LakeView Asset Management, who has been in and out of short-term Starbucks positions over the years.

But many shareholders cheering Schultz's return earlier this year see real substance to his plans to reconnect with U.S. customers.

"Howard's got a little bit of a rock star persona within the organization. I think he's the right person for this point in time," said William Blair & Co analyst Sharon Zackfia.

Schultz bought Starbucks Coffee Co in 1987 and transformed the small Seattle outfit into one of the world's most recognized brands. He was at the helm at the fast-growing company from 1987 to 2000 and remained a very active chairman.

Named for Captain Ahab's first mate in "Moby Dick," the company now has more than 15,000 locations, including more than 10,000 in the United States.

In November the company reported its first quarterly drop in U.S. customer traffic to established stores, and the trend has continued.