Burberry CEO and Style Coming to Apple

15 Oct, 2013

Burberry CEO Angela Ahrendts rebuilt the brand after over-exposure of its trademark pattern alienated wealthy clientele. Her approach: to embrace digital innovation, build a strong online business and tap Chinese and Latin American markets.

Now Apple Inc is hoping she can do the same at the world’s most valuable technology company.

In poaching Ahrendts to direct strategy, expansion and operation of its retail and online stores, Apple CEO Tim Cook has set her the task of bolstering global iPad and iPhone sales and returning some luster to the Steve Jobs-created brand which has not launched a major new device in almost four years.

Apple’s profit fell 22 percent in the June quarter as gross margins slid below 37 percent from 42 percent a year earlier and its shares, down more than 30 percent since September 2012, are being pummeled by fears of slowing growth, and competition from Samsung Electronics.

“The point of Apple retail is to sell Apple, not to sell Apple products,” said Benedict Evans, who covers mobile and digital media at Enders Analysis, a research consultancy.

“What they’ve got is somebody who can take 400 stores with really great premium positioning and turn that into 800 stores and do that in China, and do that in India and do that in Europe and in Russia and in South America and everywhere else which at the moment they don’t really have.”

Jumping to Apple – whose $157 billion net sales are nearly 50 times those of Burberry – is a challenge of a different proportion for Ahrendts. The pressure is made all the more intense by Cook’s previous stumble hiring a retail star from the UK market.

John Browett, chief executive of consumer electronics retailer Dixons, was appointed by Cook in 2012 to lead the iPad and iPhone maker’s global retail expansion. But Browett left after just six months and later said he had not fitted in with the business culture at Cupertino, California-based Apple.

Ahrendts’ digital experience means she is likely to have an easier time adapting. While at Burberry she launched a website dedicated to the firm’s traditional trenchcoats and introduced webcast catwalks, using the new iPhone5S to shoot the entire spring/summer 2014 show. She also collaborated with Google for a brand campaign named Burberry Kisses.

Reuters

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