Burberry CEO quits to join Apple

Those who follow fashion business are well aware of the contribution of Angela Ahrendts together with young, cool chief creative director Christopher Bailey. Together they made Burberry an upmarket luxury brand . Ahrendts not only oversaw a tripling of revenues to $3 billion and a stock return of 300%, but she successfully rejuvenated the 150-year-old brand that had lost its way. She was also the highest-paid chief executive in the FTSE 100 last year with a pay package of almost £17m.

On Tuesday, Burberry announced that Ahrendts is set to exit her role as the company’s chief executive in mid-2014 to join Apple. In an unusual move, Christopher Bailey, Burberry’s chief creative officer, will replace Ahrendts, taking on the dual title of chief creative and chief executive officer. Following the announcement, Burberry shares fell by more than 6 percent in early trading on
London’s stock exchange. Ahrendts, 52, is set to become Apple’s new head of retail, a position that has remained open since the departure of John Browett, who lasted less than a year after replacing the company’s first head of retail, Ron Johnson. Ahrendts is the second senior fashion executive to be hired by Apple in recent months. In July, Paul Deneve, former chief executive of Yves Saint Laurent left the label to join Apple . Ahrendts is expected to double her income when she joins Apple.
In my opinion, Cook and his team are trying to keep Apple fresh and upmarket as Burberry, which is renowned for its
astute social media and web presence. It makes perfect sense for Apple to have business minds that doesn’t think like an electronics retailer. When Steve jobs developed the Apple store, he thought outside the box. They must keep evolving that experience or it will get stale. I also believe it’s a very smart move to hire someone who understands the buying mindset of women. Attracting
women in my mind is a high priority for any company. About 85% of consumer purchases are directly made or influenced by women. So, it only makes sense to hire someone who cognises the female market. Apple’s transition to a luxury lifestyle brand means shoppers now expect more than best design and technology. With increasing competition from other Android and tablet makers, Apple has to be high-end. This is luxury business- it calls for a different mindset.

Mr. Bailey becomes the first designer not to start his own house to ascend to the top executive role. Under Bailey's
creative leadership the brand created an image of not edgy fashion with a highly accessible vision of Britishness. Sales in China and other Asia Pacific markets are the core of Burberry's revenues (up 17 per cent in the last six months to £694 million). Indeed, fashion was largely built on the idea that corporate and creative sides should be separate but hand in hand. The design types should not have worry about revenue, while moneymen should not have to bother listening to
rhapsodies about colour inspiration. Although Ahrendts has been sure to introduce him to numbers, analysis,
share prices and investors in the last few years, as part of his grooming process. It remains to be seen whether he will have the executive mettle to guide Burberry through its next chapter.