Digital snippets: Burberry and Apple executive special

The big news today has of course been about Burberry CEO Angela Ahrendts’ move to become an SVP at Apple, as well as the subsequent announcement of Christopher Bailey’s new title covering her role as well as his existing one as chief creative officer at the luxury brand. Here are the must-read stories on it:

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  • As outlined in a statement from Apple, Ahrendts’ role will be to have “oversight of the strategic direction, expansion and operation of both Apple retail and online stores”. She will join the company by mid-2014 and report directly into Apple CEO Tim Cook
  • Meanwhile, a tweet from Warby Parker co-founder Neil Blumenthal said the announcement is a signifier of how the “convergence of fashion and technology continues”, a sentiment that’s been echoed elsewhere. Vanessa Friedman of the FT wrote: “It also demonstrates the increasing give and take between luxury and tech, as great personal gadgets become luxury accessories, design plays a big role in brand equity, and luxury increasingly becomes tech-savvy”
  • Let’s not forget, Ahrendts is the second senior fashion executive to be hired by Apple this year. As reported by The Business of Fashion, Paul Deneve, former chief executive of Yves Saint Laurent joined Apple in July, and is thought to be working on wearable devices
  • But Ahrendts offers Apple another significant value too; namely understanding China. As highlighted by Quartz: “It is also gaining the expertise of one of the most successful luxury brands in China, which happens to be the world’s largest smartphone market and one of Apple’s target markets”
  • Over at The Telegraph there’s a great outline of how the first Apple Store came about under Steve Jobs, and grew to its 408 locations worldwide today. But it highlights how Ahrendts will not inherit a business without challenges. “Rivals such as Samsung and Microsoft have copied the Apple Store template and are expanding their own retail footprints around the world,” it says. And: “Apple retail has been without permanent leader for over a year following the brief tenure of former Dixons chief John Browett, who took over after Ron Johnson left in 2011 for the top job at JC Penney.”
  • But there’s also an argument the move is a bit of a step down for her – from the top of the pile at Burberry (not to mention the highest paid CEO on the FTSE 100 last year) to another fish in a big pond at Apple. Mashable has a few thoughts on that however, including the fact Apple could be grooming her for the CEO role in the future. It also outlines that Apple’s retail revenues are about seven times that of Burberry. (There’s some nice background info in this piece about the impact Ahrendts has made at Burberry too)
  • Meanwhile, the news of Bailey as Ahrendts’ successor at Burberry (taking on the dual role of chief creative and chief executive officer) has been met with mixed response. Shares dropped 7.6% on London’s stock exchange today, suggesting there’s not a great deal of confidence surrounding it, despite enormous backing from Ahrendts and from Burberry’s chairman Sir John Peace in the brand’s video announcement. During this, Bailey himself refers to the fact the brand has “only just started dreaming”, mentioning future strategies surrounding beauty and re-integrating Japan back into the business
  • As the Guardian reported, there were suggestions Bailey had been handed the top job to stop him following Ahrendts out of the door, though Burberry was forced to deny it. It instead reinforced the support he has in the rest of the company management team; in spite of the fact finance director Carol Fairweather only stepped into the role  in July this year, and chief operating officer John Smith joined in March
  • Another piece from The Business of Fashion notes  it is “truly unprecedented for a designer to graduate from creative director to chief creative officer to chief executive officer, as Bailey will have done when the transition is complete”. It asks: “Can Mr Bailey, someone who is not obviously au fait with the dollars and cents of balance sheets, intricacies of global supply chains and the excruciating detail of retail operations, run a multi-billion dollar creative business in every sense of the word and also communicate with analysts on Wall Street and in the City of London?”
  • As Friedman at the FT likewise says: “Now we have an art-school-trained man without an MBA atop a £7bn public company – albeit one who was always referred to by Ms Ahrendts as a “partner”. And we have final confirmation that these days, corporate and creative are becoming one and the same when it comes to high-end fashion. Argue all you want about whether or not it is a good development for either side (and I betcha people will argue) – the fact remains it has happened.”

Pic via Fast Company