Apple Appoints New Retail/On-Line Chief

October 15, 2013

After enduring 11 months without a guiding executive, Apple’s retail stores will share a senior vice-president with the company’s on-line retail operation when Angela Ahrendts joins the company by mid-2014 from her position as CEO of fashion house Burberry (UK). In the newly-created position, Apple said Ahrendts will have oversight of the strategic direction, expansion and operation of both Apple retail and online stores. Her appointment comes as Apple retail continues to emphasize international store expansion and to experience larger crowds at its Genius Bars. There is also on-going and unresolved discontent among a large segment of retail store employees over low pay and stressful working conditions caused by an increasing number of customers. Ahrendts’ success at Burberry has been remarkable—revenues have nearly tripled during her seven-year stint, and Burberry is now the UK’s largest apparel firm by market capitalization. Her success also brought her a major honor: the UK’s highest-paid executive, at $27 million a year.

Unlike the first two Sr. VPs of retail who had MBA degrees, Ahrendts earned a Bachelor of Arts degree in Merchandising and Marketing from Ball State University (Ind.). Her previous experience is with “soft goods” companies, and doesn’t include any experience at technology firms.

In a statement, Ahrendts said, “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.” She added that she hopes, “in some small way I can help contribute to the company’s continued success and leadership in changing the world.”

Angela AhrendtsIn a press release, Apple CEO Tim Cook said, “She shares our values and our focus on innovation, and she places the same strong emphasis as we do on the customer experience. She has shown herself to be an extraordinary leader throughout her career and has a proven track record.”

Ahrendts’s appointment comes 11 months and 16 days after the retail segment’s previous Sr. VP, John Browett, was fired in October 2012 over differences in how the retail segment should be operated. Browett had officially spent just six months in the position, having replaced Ron Johnson, who joined the company in 2000, helped mold the company’s original retail concept and guide it to remarkable financial and operational success.

Perhaps not coincidentally, Apple loaned Burberry several pre-release iPhone 5s smartphones to photograph a major fashion show last month. The photos were Tweeted as part of Burberry’s on-going focus on social media sharing to promote the company. Also, Burberry has a flagship store on Regent Street in London, about five blocks south of Apple’s Regent Street store.

Ron Johnson was making about $700,000 a year when he left the company, much less than Ahrendts’ current pay at Burberry. However, Johnson—like other Apple execs—received substantial stock grants that boosted his overall compensation.

Apple’s full press release stated:

Angela Ahrendts to Join Apple as Senior Vice President of Retail and Online Stores

CUPERTINO, California—October 14, 2013—Apple® today announced that Angela Ahrendts, CEO of Burberry, will be joining Apple in a newly created position, as a senior vice president and member of our executive team, reporting to CEO Tim Cook.Ahrendts will have oversight of the strategic direction, expansion and operation of both Apple retail and online stores, which have redefined the shopping experience for hundreds of millions of customers around the world. Apple retail stores set the standard for customer service with innovative features like the Genius Bar®, Personal Setup and One to One personal training to help customers get the most out of their Apple products.“I am thrilled that Angela will be joining our team,” said Cook. “She shares our values and our focus on innovation, and she places the same strong emphasis as we do on the customer experience. She has shown herself to be an extraordinary leader throughout her career and has a proven track record.”

“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,” said Ahrendts. “I have always admired the innovation and impact Apple products and services have on people’s lives and hope in some small way I can help contribute to the company’s continued success and leadership in changing the world.”

Ahrendts will join Apple in the spring from Burberry, where she serves as CEO and has led the company through a period of outstanding global growth. Prior to Burberry, she was executive vice president at Liz Claiborne Inc., and earlier in her career she served as president of Donna Karan International.

Later, CEO Tim Cook sent an all-employees this email explaining Ahrendts’ hiring.

Team,

I am thrilled to announce that Angela Ahrendts will be joining Apple as a senior vice president and member of our executive team, reporting directly to me. Angela is currently the CEO of Burberry.

She will lead both our retail and online teams. I have wanted one person to lead both of these teams for some time because I believe it will better serve our customers, but I had never met anyone whom I felt confident could lead both until I met Angela. We met for the first time last January, and I knew in that meeting that I wanted her to join Apple. We’ve gotten to know each other over the past several months and I’ve left each conversation even more impressed.

She shares our values and our focus on innovation. She places the same strong emphasis as we do on the customer experience. She cares deeply about people and embraces our view that our most important resource and our soul is our people. She believes in enriching the lives of others and she is wicked smart. Angela has shown herself to be an extraordinary leader throughout her career and has a proven track record. She led Burberry through a period of phenomenal growth with a focus on brand, culture, core values and the power of positive energy.

Angela will need to focus over the coming months on transitioning her current role at Burberry and will then join Apple in the spring. I am sure as all of you meet her, you will see why I am so excited that she is joining our executive team. I’d like to add a special thanks to all of our retail leaders. Your strength, talent and leadership afforded me the luxury of taking the time to perform an exhaustive search to find the best person in the world for this role.

Tim

Burberry issued a press release that said in part:

Board Change

15.10.2013

Angela Ahrendts transitions from Burberry

Burberry today announces that Angela Ahrendts will step down as Chief Executive Officer by mid-2014 to take up a new position with Apple.

Angela Ahrendts said:

“Burberry is in brilliant shape, having built the industry’s most powerful management team, converted the business to a dynamic digital global retailer, created a world class supply chain, state of the art technology infrastructure, sensational brand momentum and one of the most closely connected creative cultures in the world today. It has been an honour to have partnered with Sir John Peace and Christopher for the last eight years.

The video below was released by Burberry announcing Ahrendts’ departure and the appointment of a new CEO.

In the video below Ahrendts talks about global branding.

Ahrendts appeared at the TED conference last April, warning the audience she was better at operating a company than giving a presentation.

Share this news!
  • Twitter
  • Facebook
  • Digg
  • StumbleUpon
  • del.icio.us
  • Yahoo! Buzz
  • Google Bookmarks
E-mail this story E-mail this story

{ 11 comments… read them below or add one }

Bob Melanski October 15, 2013 at 0240

I’m glad Apple waited long enough to find somebody that won’t destroy, and can only improve at this point, their retail strategy. She will have to get better about public speaking though — Apple’s all about that.

Reply

Joe Clark October 15, 2013 at 0525

Her success “has being remarkable”?

Reply

SecretAboutBox October 15, 2013 at 0648

I do not want to be the pundit who convicts Ms. Ahrendts of failure the day her appointment is announced, but I do want to challenge the process which has put her there and the mission she must achieve in order to be genuinely successful in her new role.

Apple has created something the world has never seen before, and thus has also created needs the world has never seen before. In Ms. Ahrendts new role, Apple needs visionary guidance which is about more than brand and image, but rather is about success of operational functionality in delivering never before seen customer service experience satisfaction at an intensely personal granular level, but on a scale of duplication never before seen in business. The company is at a threshold of previously unimaginable success if that customer experience is managed correctly.

Apple has essentially become the de-facto provider of information tools in an age of unprecedented information importance to the average individual, and can grow to multiples of its current size as it continues this success. That means that this customer must find the assistance needed for her success with the tools she has and wants at the exact time she needs that assistance, delivered in such a manner that her success is guaranteed. The experience must continually shine to continually draw confidence and continued reinvestment in it. The delivery of that outcome requires disruptive revolutionary thinking at the very top, with outcomes permeating down to every part-time Specialist in every store location.

Image-branding, and “everything we do has a music angle” is nothing more than window-dressing buzz-word lip-service. Now that Ms. Ahrendt’s position has been announced it is perhaps too late for her to gain a true understanding of the needs Apple Retail is facing. Ideally, for Ms. Ahrendt to really understand what is needed, anonymous and true bottom-up experiences in dozens and dozens of stores for the dozens of purposes Apple stores address every single day would prepare her to address the real needs of Apple Retail. Again, to be clear, the truly big picture of Apple Retail is functionality, not branding. It’s not about profitability, it’s about maintaining a level of customer satisfaction of experience which assures loyalty by ever increasing numbers of new customers. Apple has the potential through its eco-system strategy to achieve a density of brand presence in the life of any consumer which has never before been seen. Every new acquisition of an Apple product in a new to them part of the eco-system makes each customer a new Apple customer. Profitability will come as a function of that success.  Unless the top leader has a crystal-clear visceral understanding of the challenges in serving that success, she cannot design strategies which can be successfully articulated by store leaders at a global level.

Apple needs a visionary who can expand the capacity of strategy delivery in a way which allows the Retail team to exist as whole individuals, not as optimized  components of a Retail mechanism. EVERYTHING Apple Retail does, at every level, is about people; the people on BOTH sides of the cash register. The stress levels encountered in the interactive retail processes for each person are ever increasing based on manifold demands of place of delivery, profitable performance, customer need, and customer expectations, which are four wholly differing values that are often contradictory.

In a prior comment addressing the failure of the evolution of Apple retail spaces I have touched on some of my views of place of delivery. Apple needs to increase the level of investment in infrastructure and team size at a level unknown for single brand market presence. The company must be ready for the waves of service-seeking customers its continued market penetration will produce BEFORE they arrive, not in “just-in-time” response to their actual arrival. “Perception is reality.” New customers expect the same levels of service delivered to those influencers who convinced them to buy their new Apple product in the first place. The fingers in the dike of managing more customers in the same space with the same staffing levels is a certain route to market failure. Apple retail needs to double its capacity BEFORE it can double its ownership percentages successfully. Failure to do so will create a perception of incompetence in customer service which will be impossible to overcome. Apple has to always make it look easy.

The dual concerns of customer needs and expectations must be addressed in the face of the increasing complexity of the technology delivered and the changing demographics of the technical acumen of the customer. Apple is designing ever cooler feature sets to a design ethos which becomes more and more difficult for the late adopters who are the new Apple customer to understand, implement, and succeed with. Furthermore, Apple technology in its ever increasing capacity and eco-system integrated functionality tends to outgrow the grasp of even those who “get it.” The pace of technological advancement outstrips the bread-and-butter customer’s ability to absorb it. For those advances to have market value Apple must be ready to support them through education and service before they become reality. Designers of technology cannot live in an echo-chamber of technology and expect everybody else to keep up on their own. As the prized millennial market ages, it too will become burdened with the challenges that age brings; and will commonly be unable to run fast enough to keep up with the ever moving train of tech evolution. “I forgot my password”, or it’s future equivalent will someday be their plaint as well, and the retail system MUST be ready to serve them at that time. Now is the time for a much more solid foundation of that structure to be built.

The real challenge Ms. Ahrendts faces is to be a genuinely BIG thinker while being aware of the impact of her actions on the very smallest detail of the operations she oversees. Her revolutionary thought and action must break through the rhetoric of retail and marketing history. She must trust and empower her staff to act accountably in matters which numbers are unable to count and reports are unable to summarize. That is the nature of working on a truly people oriented stage, not a spreadsheet; of being a risk-taking visionary, not a manager of the neatly understood. Within the Apple culture much is made of the need for flexibility and the ability to deal with incongruous and ambiguous demands. As leader of that culture she must be the absolute master of those behaviors. I sincerely hope she is up to that task.

Reply

Throwthatham October 15, 2013 at 1534

I think you understand. I’m hopeful because it really can’t get much worse. The spirit that brought many to want to work in Apple retail is gone and people are leaving in droves. I want to be proud of working at Apple again.

Reply

Mk18042 October 15, 2013 at 1738

“Apple needs to increase the level of investment in infrastructure and team size at a level unknown for single brand market presence. ”

Nail, meet head! Head, Nail!

Reply

Throwthatham October 21, 2013 at 1248

I’m concerned that it will be so long before she comes. Mid 2014? I’m not sure the retail store staff can hold put that long. We need someone to tell us or will be ok and someone cares about us.

Reply

Expert October 28, 2013 at 1131

Apple Retail moral is the lowest I’ve ever seen it. It’s worse than the Browett era and that was bad. We have been losing a lot of staff and those staff members are not being replaced by new staff. We are told on a daily basis that we have to do more with less people yet not sacrifice the customer experience. The experience is definitely being comprised and the customers are becoming angry at wait times and our service. I can only see it getting worse. This is not what I signed up for Apple!

Reply

BEE BEE October 29, 2013 at 2034

Apple does not know how to treat its retail staff and its moving from a customer centric environment to a performance based one. Their leadership in this area is poor at best and I hope that Mr. Ahrendts will be able to steer the ship into better waters.

To start with she needs to clean house and have a store based audit of every single manager from a internal employee point of view. Get honest and candid feedback from the part and full time retail staff and kill off those who are brining Apple retail down. It won’t take long as some of these people are famous within the retail ranks for bringing Apple’s retails moral down.

It continues to amaze me that a company like Apple is so good at doing what it does (we all know what that is) but it so poor at handling its own people. With the amount of resources available to Apple there is no excuse to treat its hard working people with dignity, a livable wage at a minimum and have a stellar work environment.

If not the retail staff will implode and it will be a former shell of itself. Apple will have to beg former Walmart employees to work for them after years of negativity, neglect. This will also get worse as the employment environment gets better and people leave for greener pastures.

It turn if will effect the brand and Apple’s business in the long run. I personally think people should start publicly calling these people out. We all know who they are, lets the rest of the world know too.

Reply

Throwthatham October 29, 2013 at 2019

Me either! My store is down from just over 100 employees to around 80… It sucks to have customers mad at you everyday.

Reply

Throwthatham October 30, 2013 at 1003

BeeBee is very wise. Sign me up.

Reply

Ex-Apple November 19, 2013 at 1140

Since I left 2 years ago, the store has pretty much turned over the entire staff. The last few stragglers are finding other positions and there are clapouts constantly. In my tenure at the store, we took pride in retention and our biggest issue was how to keep long-timers challenged and find some way for them to continue a career path within the company. This was difficult and pretty much all-consuming as a manager. I guess the solution ended up being turnover. Such a shame. The knowledge that people acquired over time was what made them valuable to the consumer; employees with short duration just don’t have the time to learn the really tricky stuff. I’m glad I left when I did, I would be heart-broken to have to deal with it now. What made working there great was that everyone was really into Apple, technology, and learning and sharing. Now it’s just a paycheck. :-(

Reply

{ 1 trackback }

Leave a Comment