Latest News & Current Events

Burberry CEO Ahrendts Moves to Apple

UK retailer Burberry Group Plc named Christopher Bailey as chief executive officer to succeed Angela Ahrendts, tasking a designer with no board level experience to navigate the U.K.’s largest luxury company through a slowing industry.

Ahrendts, 53, who made Burberry a digital forerunner in the fashion world, will depart for Cupertino, California-based Apple Inc. in the middle of 2014. The Burberry CEO who led the London-based company for almost eight years and saw sales more than doubled and the shares increase more than threefold, has been tapped for a newly created role of senior vice president of retail and online stores.

Bailey takes over at a time when the luxury industry is polarizing and must decide whether to move more upscale to challenge brands like Prada and Louis Vuitton, or target a wider audience with less expensive goods.

The really big question however is -  Why Ahrendts would leave Burberry's top spot for a position under Apple CEO Tim Cook."It's a truly baffling move," said Forrester Research retail analyst Sucharita Mulpuru. "There must be a big pay-off at the end. She's leaving a glamorous job where she's the boss, where she's built market cap, where she can do anything she wants. People like Ahrendts take board positions and become Tim Cook's boss. I'm sure they are paying her a ton of money. Maybe they are grooming her to take over, but it seems odd."

Carolina Milanesi, Gartner's research VP, on the other hand, reacted by saying, "I believe this is a good match for Apple. Burberry's CEO brings expertise in dealing with a good balance of popularity and status. ...From a retail experience. it is about being able to deal with more and more people going through the stores while keeping the high-touch customer experience that they are known for."

While Apple's brand is still extremely strong, the Cupertino, Calif.-based tech giant's bottom line has slumped. Burberry revenues haven't met analyst expectations this year, either, but the brand has recently been lauded as a shining example of retail evolving in the digital age.

Burberry's stores in locations like Chicago's Magnificent Mile are cutting edge, with jaw-dropping digital displays and staffers wired up with iPads and other tech bells-and-whistles. But Apple's stores, typically, are much, much bigger than Burberry's. And maybe that's the motivation behind the design-minded Ahrendts' big move—spatial canvases at increased scale.

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