Burberry CEO's Departure To Apple Could Mean Trouble For The Luxury Brand

The news that Burberry CEO Angela Ahrendts
will leave the companyto head up retail at Apple could change the luxury brand’s fate overnight.

Ahrendts will be replaced by head designer Christopher Bailey.

The departure comes on the heels of Burberry CFO Stacy Cartwright’s exit in January and leaves Burberry without “the two key architects” of its growth, reports Bloomberg News, citing Nomura.

While Bailey is a brilliant designer, it’s unclear if he will be a successful executive, writes Bloomberg reporter Andrew Roberts.

“Bailey takes over at a time when the luxury industry is polarising 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,” Roberts writes.

Balancing creative with business will be a huge challenge for Bailey, Mario Ortelli, an analyst at Sanford Bernstein, told Bloomberg.

“Even for a person as talented as Mr. Bailey, it is hard to have enough time to carry out both of these roles,” Ortelli said.

Investors are also sceptical about Bailey’s leadership skills — Burberry shares tumbled on the news of Ahrendts’ departure.

But Dhani Mau at Fashionista makes a case for Bailey’s talent.

“Bailey and Ahrendts worked together to turn Burberry back into a valuable, high-end luxury brand after years of being plagued by mass market knock-offs, as well as expanding its retail business globally,” Mau writes. “Bailey certainly played a role in that beyond just designing clothes, and is undoubtedly commercially-minded.”

Still, Ahrendt’s departure leaves Burberry at a major crossroads.

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