By Dow Jones Business News, October 15, 2013, 02:55:00 AM EDT
Apple Hires Burberry CEO as Retail Chief
LONDON--Apple Inc. ( AAPL ) tapped Angela Ahrendts, currently chief executive of British luxury retailer Burberry Group
PLC (BURBY, BRBY.LN), to head its retail efforts--recruiting a seasoned industry executive credited with turning around
the Burberry brand, while filling a big gap in the Cupertino, Calif., tech company's retail operations.
Apple said Ms. Ahrendts, 53 years old, will join Apple next year in the new position of senior vice president of
retail and online stores. She will become a member of the executive team and report directly to Apple Chief Executive
Tim Cook. She will oversee the "strategic direction, expansion and operation" of both Apple retail and online stores,
The appointment fills a big gap in Apple's retail operations, stemming from the 2011 departure of Ron Johnson, who
vacated the role of senior vice president for retail to join J.C. Penney Co. (JCP). His replacement, John Browett, left
the company last year.
Apple is now expanding that role to include responsibility for online store sales. Ms. Ahrendts has served as chief
executive of Burberry since 2006.
Ms. Ahrendts tentatively agreed to join Apple as its next retail chief several months ago, according to one person
familiar with the situation. Her hiring "was locked and loaded" this summer, this person said. But the announcement was
delayed as Burberry weighed a successor.
A Burberry spokeswoman declined to comment. An Apple spokeswoman declined to comment.
In pursuing Ms. Ahrendts, Apple won out over a more recent bid for Ms. Ahrendts by J.C. Penney. The department store
chain pursued the Burberry leader for its own top job, according to a person familiar with the situation. J.C. Penney is
looking to replace Mr. Johnson, who once held the role Ms. Ahrendts is stepping into and left J.C. Penney after his
attempted makeover sent sales there crashing.
A J.C. Penney spokeswoman didn't immediately respond to a request for comment.
Ms. Ahrendts's arrival comes as Apple is looking to revitalize its string of iconic stores. Once a trend-setter in
tech retail, Apple's glowing, bright temples to its devices have lost some of their magic, with open layouts routinely
copied by competitors. Apple has meanwhile moved aggressively to open more stores, while retail sales have grown more
slowly. The company saw average revenue per store fall 2.5% in the nine months ended June 30. Mr. Cook has said he plans
to expand Apple retail stores in China--a place where Burberry has found success.
Ms. Ahrendts is the second luxury-industry chief this year to announce a departure for Apple, after Paul Deneve left
as chief of Kering SA's (KER.FR) Yves Saint Laurent brand to become vice president of special projects at the tech
company. In recent years, the luxury industry has become a breeding ground for top brand managers, who were
traditionally drawn from much bigger consumer-goods companies such as Procter & Gamble Co. (PG) and Unilever PLC (UL,
Ms. Ahrendts is credited with leading a sharp turnaround at the British fashion house, almost tripling sales and
quadrupling the share price during her tenure. At the time she came aboard, the company--best known for its red, beige
and black-check hallmark pattern featured on many of its clothes--was suffering from brand overexposure. That was
hitting sales to the high-end customer it long catered to.
Ms. Ahrendts led efforts to regain its more exclusive clientele, updating its clothing range with more subtle designs
and understated offerings with her creative director, Christopher Bailey. Mr. Bailey will now take on the chief-
executive role at Burberry, the company said. Ms. Ahrendts also leaned more heavily on sales through Burberry-owned
stores, instead of relying on sales from department stores.
Ms. Ahrendts said in a 2010 WSJ. Magazine profile that she didn't compare Burberry's strategy to those of peers such
as Gucci and Chanel. "If I look to any company as a model, it's Apple," she said. "They're a brilliant design company
working to create a lifestyle, and that's the way I see us."
Reflecting her standing in the luxury retail industry, Burberry shares fell as much as 5% in early London trading.
"I am profoundly honored to join Apple in this newly created position next year, and very much look forward to working
with the global teams to further enrich the consumer experience on and offline," Ms. Ahrendts said.
Before joining Burberry, Ms. Ahrendts was executive vice president at apparel maker Liz Claiborne Inc., and earlier in
her career she served as president of Donna Karan International.
"Apple did the senior-executive hire equivalent of unveiling the new iPhone," said Hal Reiter, chairman and chief
executive of Herbert Mines Associates Inc., a New York executive-search firm that specializes in retailing. "She has
international experience. She has fashion experience. Apple is a fashion product," he said.
-Sam Schechner in Paris and Simon Zakaria in London contributed to this article.
Write to Kathy Gordon at firstname.lastname@example.org
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