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Originally published October 15, 2013 at 6:34 PM | Page modified October 16, 2013 at 6:43 AM

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Apple hires Burberry CEO to boost store sales

Apple hired Burberry executive Angela Ahrendts to run its retail and online stores.


The Associated Press

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SAN FRANCISCO — Apple is entrusting the elegant stores that help define its brand to Angela Ahrendts, a respected executive who blended fashion sense with technological savvy to establish Burberry as a mark of luxury and success.

The hiring announced Tuesday is a coup for Apple. Besides providing the Cupertino, Calif., company with another sharp mind, Ahrendts should help Apple deflect potential criticism about the lack of women in the upper ranks of its management.

Silicon Valley’s long-running reliance on men to make key decisions has come into sharper focus as online messaging service Twitter prepares to go public. Twitter’s closely scrutinized IPO documents called attention to the San Francisco company’s all-male board of directors and the presence of just one woman in its executive inner circle.

Apple has one woman, former Avon Products CEO Andrea Jung, among the eight directors on its board.

Ahrendts will report directly to Apple CEO Tim Cook when she leaves Burberry to join Apple next spring in a newly created position of senior vice president in charge of retail and online stores.

In a memo sent Tuesday to Apple employees, Cook said he knew he wanted to hire Ahrendts from the time the two met in January and realized, “She shares our values and our focus on innovation.”

Ahrendts telegraphed her admiration of Apple in 2010 when The Wall Street Journal asked her if she was trying to mold Burberry into something similar to other luxury brands in the fashion industry.

“I don’t look at Gucci or Chanel or anyone,” Ahrendts told the Journal. “If I look to any company as a model, it’s Apple. They’re a brilliant design company working to create a lifestyle, and that’s the way I see us.”

Ahrendts’ arrival comes at a crucial time for Apple and the stores that serve as the main showcase for its iPhones, iPads, iPods and Mac computers.

Like the rest of the company, Apple’s stores aren’t doing quite as well as they once were, primarily because tougher competition has forced the company to trim its prices.

For instance, in Apple’s quarter ending in late June, average revenue per store declined 9 percent from the previous year to $10.1 million. Even more troubling, the retail division’s operating profit for the quarter dropped 19 percent from last year to $667 million. Apple ended the period with 408 stores located in 13 countries.

The stores, which are staffed by nearly 42,000 workers, may have been suffering from a management void.

Ron Johnson, a former Target executive credited for turning Apple’s stores into a thriving operation, left the company in 2011 to become CEO of J.C. Penney. Johnson’s successor, John Browett, left Apple in a management shake-up a year ago. Since then, the stores have been under the management of a lower-level executive and the senior vice president job remained vacant.

This will mark the first time that the Apple’s senior vice president in charge of its brick-and-mortar stores also will be in charge of the company’s online sales.

In his memo to Apple employees, Cook said he never had met an executive capable of doing both jobs until he got to know Ahrendts.

“She believes in enriching the lives of others and she is wicked smart,” Cook wrote.

Ahrendts, 53, proved her ability to galvanize a well-established brand during the past seven years working in London as Burberry’s CEO.

Burberry, established in 1856, was growing stale until Ahrendts came along to build upon the popularity of its trench coats by adding more flair and panache to the company’s fashion lineup.

To help build buzz, the company brought more technology to the catwalk by streaming its fashion shows through online outlets such as Twitter. The strategy boosted Burberry’s sales as Web surfers bought the fancy coats, shoes and bags the company previewed.

In the latest measure of Burberry’s success under Ahrendts, the company’s quarterly results released Tuesday disclosed that sales rose 14 percent to $1.6 billion in the first half of this year.

Sub 13 plus rule goes here

Apple on Tuesday invited media to an event next week in San Francisco, where the consumer-tech giant is expected to show off new iPad models for the holiday season.

The invitation, which says, “We still have a lot to cover,” announced an event Oct. 22 at the Yerba Buena Center for the Arts. The event will take place a month after Apple unveiled two new iPhone models and launched them in several countries worldwide, selling 9 million of the new smartphones in the first weekend of availability.

The event is expected to include new iPads, as well as details on Apple’s new Mac Pro and its OS X Mavericks operating system. The Mac Pro, with its new design, was previewed at Apple’s Worldwide Developers Conference last June, while Mavericks, also debuted at that same show, has been in beta testing since then.

Apple last updated its iPad line almost a year ago, when the iPad Mini made its debut. The smaller tablet — the screen is slightly less than 8 inches, while the full-sized iPad measures almost 10 inches diagonally — arrived after Google and Amazon popularized the smaller tablet design with their Nexus 7 and Kindle tablet offerings, respectively.

With this year’s update, many expect Apple to upgrade the iPad Mini’s screen to Apple’s so-called Retina display, a high-definition screen that would make the device more comparable to new versions of the Nexus and Kindle, which have higher-resolution screens than Apple’s smaller tablet.

The fifth-generation full-sized iPad is expected to be faster and lighter, with a slimmed-down case similar to the iPad Mini, and could receive Apple’s new 64-bit A7 chip, which was introduced at September’s iPhone launch.

After launching the iPad Mini and fourth-generation iPad last October, Apple sold 3 million of the devices in the first three days of availability, double the previous record for an iPad launch; in the all-important holiday shopping quarter, Apple set another record by selling 22.9 million iPads in three months, though the company did not break down how many were iPad Minis.

If Apple does launch new iPads at the Oct. 22 event, they will join the iPhone 5S and iPhone 5C as the Cupertino, Calif., company’s premier offerings for the holiday shopping season, which Apple has dominated the past two years.

San Jose Mercury News



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