Apple Hires Burberry CEO to Boost Store Sales

SAN FRANCISCO (AP) -

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

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 he 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 upscale brands in the clothing industry.

“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 told the Journal.

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 nine 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 Inc. executive credited for turning Apple’s stores into a thriving operation, left the company in 2011 to become CEO of J.C. Penney Co. 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 smart,” Cook wrote.

Ahrendts, 53, proved her ability to galvanize a well-established brand during the past seven years, when she worked 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 line-up.

To help build buzz, the company brought more technology to the catwalk by streaming its fashion shows through online outlets. The strategy boosted Burberry’s sales, as online users 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 billion pounds ($1.6 billion), in the first half of this year.

Ahrendts worked closely with Burberry’s top creative officer, Christopher Bailey, who will become CEO when she leaves.

Ahrendts grew up in New Palestine, Indiana, which was a city with a population of about 2,000 in her youth. She graduated from Ball State University, located about 50 miles from her home town.