This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.theguardian.com/business/2013/oct/15/burberry-angela-ahrendts-new-job-apple

The article has changed 7 times. There is an RSS feed of changes available.

Version 5 Version 6
Angela Ahrendts leaves Burberry for new job at Apple Angela Ahrendts leaves Burberry for new job at Apple
(about 9 hours later)
Angela Ahrendts, the chief executive who rescued Burberry, is leaving the fashion house for a new job at Apple, in a move that further depletes the ranks of female chief executives of FTSE 100 firms.
Ahrendts joins Apple in spring 2014 to take up a newly created role overseeing the expansion of Apple's retail stores. She is being replaced at Burberry by Christopher Bailey, who will also keep his current post as chief creative officer. Angela Ahrendts, the chief executive who led British brand Burberry's transformation into a sexy modern fashion label, is swapping trenchcoats for a rather different range of macs.
Her departure comes amid growing concern about the small number of female executives at the top of British business, and leaves just two women in charge of the largest UK-listed companies: Alison Cooper at Imperial Tobacco and Carolyn McCall of easyJet. Their number has been depleted by the departure of Marjorie Scardino from Pearson and Cynthia Carroll from Anglo American. Ahrendts, who was the highest-paid chief executive in the FTSE 100 last year with a pay package of almost £17m, has been poached by Apple, the world's most valuable company. She is expected to double her income when she becomes the boss of the iPad maker's global retail division next summer.
Ahrendts, who was the highest-paid chief executive in the FTSE last year with a total package worth £16.9m, said she was honoured to be joining Apple. Half a billion pounds was wiped off Burberry's stockmarket value as her departure, and the appointment of Burberry's designer Christopher Bailey as her replacement, was announced.
She also paid tribute to colleagues, describing Burberry as a truly great company: "Burberry is in brilliant shape, having built the industry's most powerful management team, converted the business to a dynamic digital global retailer [and] created a world-class supply chain, state of the art technology infrastructure, sensational brand momentum and one of the most closely connected creative cultures in the world today." Yorkshire-born Bailey and Ahrendts, a US fashion executive from Indiana, have worked closely together since her arrival in 2006, with the designer contributing ideas to many aspects of the business. The Royal College of Art graduate is credited with the social media strategy under which Burberry became the first big fashion house to stream catwalk shows live on the internet, but it is almost unknown for a design specialist to lead a company of Burberry's size.
Bailey said he was moved and humbled to take on the CEO role. "Whilst I am sad no longer to have the inspirational leadership of Angela, who has been an absolute joy to work with, I feel more than confident that part of her legacy is an enormously strong team in all of our areas." Ahrendts is moving to a demanding job as Apple's status as the world's most profitable computer and smartphone maker is under pressure from rivals such as Samsung. But earlier this week Apple was named the world's most valuable brand, toppling Coca-Cola, and the stores she will oversee have higher sales per square foot than any other retailer in the world.
Tim Cook, chief executive of Apple, said he was thrilled that Ahrendts would be joining his team. "She has shown herself to be an extraordinary leader throughout her career and has a proven track record." The last person to run Apple's retail empire was also hired from the UK. Former Dixons boss John Browett, was lured to the group's head office in Cupertino, California and handed a "golden hello" reported to be worth $56m (£35m). However, Browett never collected the full cash pile as he was fired after less than six months in the role in October last year.
Shares in Burberry fell 5.5% at the start of trading, down 93p to £14.92. Ahrendts will be well cushioned from any such risk in her new job by a stockpile of cash and shares gathered at Burberry. She currently owns shares worth £6.2m and will receive another tranche worth £7.34m next month. Meanwhile, Ahrendts is working beyond her six-month notice period, which would end in April, enabling her to collect a bonus worth up to double her £1.1m salary as well as shares worth £6m due to be handed over in June. Including her basic pay that will take her total pay-out over the next six months to nearly £16m.
Ahrendts is not the first fashion executive to join the ranks of the iPhone maker. Paul Deneve, the former chief executive officer of Yves St Laurent, was hired recently to work on special projects. Ahrendts said: "I'm proud of everything we've built, and the management team we have in place around the world and infrastructure we have put in place will provide a rock solid foundation for all [Bailey's] innovation."
The announcement of her departure came as Burberry announced a 17% rise in revenues to £694m over the six months to the end of September. Sales in Burberry shops rose 13% on last year, driven by spending in Asia, Europe, the Middle East, India and Africa and the Americas. Bailey said: "We've done a lot of dreaming and made those dreams into solid strategies and built an incredible operational and management team to be able to meet those strategies."
The company also reported high single-digit growth in mainland China, pleasing investors after last year's shock profit warning on the back of flagging spending from Chinese consumers. The chancellor, George Osborne, namechecked Burberry this week, along with Rolls-Royce, as he talked up British brands on a visit to China. Burberry shares slumped nearly 8% as investors worried that Bailey would struggle to run a £7bn company as well as heading the design operation. There were suggestions that Bailey had been handed the top job to stop him following Ahrendts out of the door.
Crucially for Apple, Ahrendts knows China. One of the world's largest markets, it has also proved the toughest to crack for Apple's CEO, Tim Cook. Burberry has 69 stores in China, and last year 14% of its income came from there. Apple's retail sales, at almost $19bn a year, dwarf Burberry's but still only represents 12% of the iPhone maker's income. Burberry insisted Bailey's appointment was the result of a long-term succession plan, but analysts and investors were sceptical. Rahul Sharma, a luxury goods analyst at Neev Capital said Burberry had little choice but to choose Bailey as Ahrendts most likely successor after former finance director Stacey Cartwright left earlier this year. "I think Angela's move was a surprise to them. I would question whether they had any plan in place," she said.
Ahrendts joined the board in 2006, when she took over from her fellow American Rose Marie Bravo, who had already begun the process of distancing the brand from downmarket associations and started dealing with a flood of cheap fakes on the market. Ahrendts took the 157-year-old fashion house into new products, from animal-print scarves to own-brand cosmetics, and expanded its presence in the United States. While Ahrendts said Bailey, the Royal College of Art graduate who has been Burberry's creative visionary for 12 years, would be backed by "the industry's most powerful management team," all the leading players are new. Finance director Carol Fairweather only stepped into the role in July this year while chief operating officer John Smith joined in March. While the company reported strong sales figures on Tuesday, it is still struggling to absorb the fragrance and beauty business it brought in house this spring and next year must tackle the handover of its key Japanese business from a long-term franchise partner.
Bailey, a graduate of the Royal College of Art, has been at Burberry since 2001. He is credited with overseeing a canny social media strategy that has seen the company become the first big fashion house to stream its catwalk shows live over the internet, as well as launching the Art of the Trench website for fans of Burberry macs. The firm has said it has no plans to bring in a new creative director to work with Bailey. Tim Cook, Apple's chief executive of Apple, said he was thrilled that Ahrendts would be joining his team. "She has shown herself to be an extraordinary leader throughout her career and has a proven track record," he said.
Susan Vinnicombe, a professor of women and leadership at Cranfield School of Management, said the departure of Ahrendts was a huge loss for Burberry. "She has been tremendous as a CEO and a major champion of female talent. Angela is someone who has always paid attention to developing her female executives," said Vinnicombe. Cook is banking on Ahrendts' experience building a global network of stores to build Apple's position as a global luxury brand, particularly in China where Burberry has grown rapidly while the tech company has struggled. Apple's store portfolio remains relatively small and in some areas is straining to cope with the demands of millions of new iPad and iPhone owners.Cook is clearly keen to build Apple's style credentials. Ahrendts joins Paul Deneve, the former chief executive officer of Yves St Laurent, who was recently hired by the iPhone maker to work on special projects.
Ahrendts included, Burberry has the highest percentage of women on its board of any FTSE 100 company, with three out of eight places around the boardroom table occupied by women. It is also the only FTSE 100 company with two women in the most senior executive roles, with Carol Fairweather as chief financial officer. The departure of Ahrendts will deplete the already-slim ranks of female chief executives at the UK's biggest companies. Her return to the US means there will be just two women running FTSE 100 businesses – Alison Cooper at Imperial Tobacco and Carolyn McCall, the chief executive of Easyjet.
Heather Jackson, a campaigner for gender diversity in the boardroom, said: "The FTSE 100's loss is the Fortune 500's gain. Angela Ahrendts has shown what an incredible business leader she is, taking good companies into awesome companies. And Apple needs a businesswoman like that.
"We should be celebrating the fact that a woman has gone into an incredible position," Jackson said, adding: "The best person got it on merit, not tokenism."
The big problem, she said, was that so few women were eligible for the top jobs because for decades not enough talented women had been promoted through the ranks. "We can't right a wrong overnight. We have only got so many women eligible at this moment in time, so let's look to the future and make sure that there is more of them like Angela coming through."
Richard Hunter, at Hargreaves Lansdown stockbrokers, said Ahrendts was leaving the company in good shape. "The shares have had a rocky ride yet have still managed to outperform the market strongly. Over the last year, Burberry has added 41% to its price, as compared to a 12% hike for the wider FTSE 100."
Our editors' picks for the day's top news and commentary delivered to your inbox each morning.Our editors' picks for the day's top news and commentary delivered to your inbox each morning.