Apple has finally filled a key hole in its executive team, hiring Burberry CEO, Angela Ahrendts,
to run its retail stores and online site.
This is a critical hire for Apple: The company’s retail stores are a major competitive advantage, and since ousting its prior retail chief last October, Apple has been searching for the right person to run the business for almost a year.
Few fashion-challenged tech aficionados (myself included) had heard of Ahrendts before this morning, but she’s a big star in the luxury world.
Born and raised in a small town in Indiana, Ahrendts ascended through the ranks of Warnaco, Liz Claiborne, Donna Karan, and other fashion companies before taking the helm at Burberry in 2006. In her 7 years at the British fashion firm, she has transformed the company’s products and business and delivered excellent returns for shareholders. Ahrendts is said to be a workaholic with both an excellent fashion and design sense and analytical business skills, and according to this 2010 Wall Street Journal profile, the people who know her and work with her have great respect for her.
One question that arose after the news broke was why Ahrendts would go from CEO of Burberry to SVP of an Apple division — a seeming step down on the corporate hierarchy. There are likely at least two answers to this.
The first is that Apple’s retail business is vastly larger than Burberry, with about $US16 billion in annual sales vs. Burberry’s ~$2+ billion.
The second is that, if Ahrendts fits into Apple’s culture and does an excellent job running its retail business, she probably has a good chance to become the company’s next CEO.
Apple’s senior executives have begun to emerge from the shadows in the years following the death of Steve Jobs. Although all of them are talented and capable, there is no clear successor-in-waiting. Assuming Apple continues to roll out great products over the next few years, Tim Cook will probably be Apple’s CEO for a while. But at a company the size of Apple, it is always helpful to have a handful of strong CEO candidates on the senior executive team to take over when the time comes.
Unlike anyone else at Apple (with the exception of Cook), Ahrendts has run a major public manufacturing company whose success depends largely on high-end consumer product design and execution. She is not a “technologist,” but Apple’s greatest strength has never been raw technology. It has been understanding the intersection of “liberal arts and technology,” as Jobs himself described it — and designing beautiful, intuitive technology products that human beings love.
Ahrendts has already demonstrated at Burberry that she can identify great designers and give them enough creative freedom to design and make great products, while also delivering on key business metrics (e.g., designing products that can actually be engineered and then produced on time and on budget). If Apple is to continue to dazzle global consumers with its products while remaining a staggeringly successful and profitable business, it will need both of these skills at the top. It will also need a leader who global consumers find impressive and inspiring. Ahrendts has all of those qualities.
So, yes, Apple has finally hired a strong executive to run its retail business. But if Angela Ahrendts works out at the company, she could eventually ascend right to the top.