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Apple adds a dash of Burberry luxury and social media savvy by poaching its CEO

October 15, 2013
October 15, 2013

Apple has poached Angela Ahrendts, CEO of the British luxury fashion house Burberry, who will become Apple’s third retail chief in as many years.

Ahrendts is an American who steadily climbed the ladder in the fashion industry before joining Burberry. The luxury firm’s share price more than tripled during her eight-year tenure as CEO, as she carefully marshalled control of the storied brand while pushing into China and other fast-growing emerging markets.

She isn’t the first executive to abandon the C-Suite for a more modest title at Apple: John Browett, who formerly ran Apple’s retail devision, was previously CEO of London-listed electronics retailer Dixons. And earlier this year, Luca Maestri left his role as CFO of Xerox for the more junior role of corporate controller at Apple.

Ahrendts will leave behind a staggering annual pay package of £16.9 million ($27 million), which made her by far the highest-paid CEO in the FTSE 100 last year. She will take charge of Apple’s online store in addition to its bricks-and-mortar retail outlets. Burberry’s shrewd use of social media to bolster its brand is widely praised in the luxury industry, so similar initiatives may be on the way at Apple. As it happens, Burberry and Apple teamed up last month for a campaign to share fashion-show photos taken entirely with iPhones.

“We have become a retail business,” Ahrendts said in a goodbye interview with her successor, Christopher Bailey. “We are a digital luxury retailer.” Burberry reported a 17% jump in retail revenue in its fiscal first half today, thanks in part to online sales that “continued to outperform in all regions,” the company said. But its shares dropped by 5% on the news of Ahrendts’s departure.

For all of Apple’s retail might—its stores consistently boast the world’s highest sales per square foot—Ahrendts’s new job has a rocky recent past. Browett lasted only six months in the position, admitting that he “just didn’t fit” with the company culture. Ron Johnson, Apple’s head of retail for nearly 12 years, left in late 2011 for a disastrous stint as boss of retailer JC Penney. Browett now runs London-based clothing retailer Monsoon Accessorize, which is not without its own problems. But never mind: Apple’s world-beating brand and mountains of cash continue to attract top executives who are willing to take a step down in exchange for a ticket to Cupertino.

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