Apple hires Burberry Group CEO
APPLE has hired Burberry Group CEO Angela Ahrendts as head of retail operations, ending a year-long search and adding the first woman to its 10-member executive team.
APPLE has hired Burberry Group CEO Angela Ahrendts as head of retail operations, ending a yearlong search and adding the first woman to its 10-member executive team.
Ms Ahrendts will oversee Apple’s more than 400 retail outlets and its online store, the company said yesterday. Apple is tapping a US executive who has more than doubled Burberry’s sales since 2006, rejuvenating the brand partly by embracing the internet and social networks.
At Apple stores, hundreds of millions of visitors a year test the latest iPhones and iPads, giving it an advantage over Google, Samsung and Microsoft.
The challenge for Ms Ahrendts is to fend off rivals such as Samsung, which has overtaken Apple in smartphone sales and is also opening its own stores.
“Ms Ahrendts has always been incredibly focused on the digital side of the business,” said John Guy, an analyst at Berenberg bank in London. “If she was going to go anywhere from Burberry, it would be to that area.”
She will join Apple early next year, reporting to CEO Tim Cook. Apple, the world’s most valuable company, has been without a fulltime retail chief since last October, when former retail head John Browett was ousted by Mr Cook as part of a broader management shake-up.
In almost eight years at London-based Burberry, Ms Ahrendts extended a transformation started by her predecessor, Rose Marie Bravo.
She started streaming fashion shows live on the web, allowing customers to order items online during the events. Burberry’s shares have gained more than threefold during her tenure.
Ms Ahrendts, who previously worked as executive vice- president at New York-based Liz Claiborne and was president of Donna Karan International, will now return to an American company. She will be joining the likes of design guru Jonathan Ive and marketing head Phil Schiller.
Her compensation for the year ending March 31 was valued at £3.26m, according to Burberry’s annual report. Apple executives dominate the list of highest paid US executives.
Christopher Bailey, who for the past six years has been chief creative officer at Burberry, the largest British luxury-goods producer, will replace Ms Ahrendts as CEO.
Burberry fell as much as 6.4% in London and dropped 4.1% at 1,520p midday yesterday. Apple rose 0.7% in New York. It has lost 6.8% this year.
Apple’s stores earn more than high-end retail outlets like Tiffany & Company and give the company a way to promote and teach customers about its products. The company generated $4.1bn in revenue from its retail stores in the third quarter, with 84-million shoppers visiting its outlets.
Its first head of retail was Ron Johnson, who left in 2011 to become CEO of JC Penney, a job he was later fired from after disappointing sales. Ms Ahrendts takes the helm as Apple is opening more stores outside the US to drive growth, including in China.
“Apple stores are a self-funding marketing operation,” said Benedict Evans, an analyst with Enders Analysis in London. “She’s about delivering a great experience, with the right economics.”
Ms Ahrendts’s experience overseeing a luxury brand is especially important for Apple, Mr Evans said. By contrast, Mr Browett came from a retail background more focused on cost savings that did not mesh with Apple, he said. Mr Cook had been overseeing the company’s stores in the absence of a full-time executive.
Ms Ahrendts has long cham- pioned the integration of technology and fashion. Burberry streamed a fashion show globally live last month using Apple’s new iPhone 5s. She helped push Burberry to team up with Twitter to stay on the cusp of technology by posting backstage photos of a runway show on the socialnetworking service.
“You are going to see relationships with technology across anything that’s brand,” Ms Ahrendts told Bloomberg Television last month.
“I don’t care if that’s in the home or what you wear. I just think it’s a new fact of life.”
As technological differences between smartphones become less apparent to most customers, Apple’s marketing and retail experience gives it an advantage over competitors, said Richard Windsor, an independent analyst with Radio Free Mobile.
“This it yet another move to strengthen the brand and retail experience,” he said.