Burberry’s Angela Ahrendts, one of only three female chief executives in the FTSE 100, is to quit the fashion group to lead tech giant Apple’s retail division. Christopher Bailey, already Burberry’s creative director, will take over as CEO when Ahrendts departs.
Since Ahrendts took over in 2006, shareholders have enjoyed a total return of 354%, seven times better than that of the FTSE 100. Burberry’s shares fell by 7% on the news.
What the commentators said
You can see why investors were sorry to see her go, said Jonathan Guthrie in the FT. Ahendts managed to “push Burberry upmarket”; knock-offs were being worn by “the undeserving poor” when she joined. The group has expanded into “posh shopping malls”, many in Asia, and is no longer measured against UK high-street fashion businesses.
It’s also clear why Apple was keen to grab her, as John Jannarone pointed out in The Wall Street Journal. She has made Burberry “the most digitally savvy company in luxury”. She has also “rolled out the brand” in emerging markets such as China, where Apple is hoping to expand.
Hiring Ahrendts is part of Apple’s attempt to be seen as a “luxury lifestyle” company, not just a “technology innovator”, added David Godber of design consulting firm Elmwood.
Harder to understand, however, is why Burberry thinks Bailey can do two jobs at the same time, said Nils Pratley on Theguardian.com. His dual role “is an outright gamble that a superstar designer can manage both the product and the company”. No other retailer does things like this, and no wonder.
It makes no sense, for instance, for Next’s Simon Wolfson to “spend less time worrying about capital allocation and more time designing dresses”.
What’s more, with China slowing, maintaining Burberry’s pace will be a big ask, said James Moore in The Independent. Ahrendts’ exit demonstrates another key trait of successful CEOs: knowing when to leave.
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