Apple Retail: Meet the new boss, better than the old boss

“Apple Inc’s (AAPL) Apple Retail division has seen better days. Apple Retail enjoyed explosive growth from 2000 to 2011 under Ron Johnson’s leadership,” Garden City Growth and Value writes for Seeking Alpha. “Regardless of whether investors attribute most of the credit in Apple Retail’s growth to former Apple CEO Steve Jobs, there is no denying that Apple Retail boss Ron Johnson played a vital role in helping the division grow.”

“Apple made a huge mistake in hiring John Browett of Dixons Retail to replace Johnson,” GCGV writes. “Independent research firm Saibus Research published two reports about Apple Retail’s operational missteps under Mr. Browett and that it was a good idea for Apple to cut him loose before he did any major damage to Apple’s brand.”

“The bad news for Apple Retail was that Apple went a year before hiring a new senior vice president of retail (and online stores) and this helped contribute to its revenue only growing by 8% year-over-year in the first nine months of FY 2013,” GCGV writes. “The good news was that Apple made a great hire when it announced that it hired Burberry’s former CEO Angela Ahrendts as its new senior vice president of retail and online stores… Tim Cook struck out by hiring John Browett to succeed Ron Johnson as head of Apple Retail. However, he rebounded and hit a grand slam by hiring Angela Ahrendts as Apple Retail’s next boss.”

Read more in the full article here.

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Tim Cook’s email to employees announcing hiring of Angela Ahrendts as retail chief – October 15, 2013
Apple hires Burberry CEO Angela Ahrendts as retail chief – October 15, 2013
Burberry CEO discusses iPhone 5s collaboration with Apple – September 17, 2013
Apple grants Burberry early access to iPhone 5s for fashion show photography – September 12, 2013
Apple’s long hunt for retail store chief continues – January 7, 2013
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Report traces Apple Store ‘mistake’ all the way to Tim Cook; shift in emphasis from service to profits comes from Cook, say insiders – August 29, 2012
Reports persist of Apple Retail Store budget cuts, emphasis on revenue over customer satisfaction – August 28, 2012
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Apple newbie John Browett brings Dixons to Apple Retail Stores – August 17, 2012
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Tim Cook emails UK customer: John Browett’s role isn’t to bring Dixons to Apple Retail – February 1, 2012
Eyebrows raised over Apple’s hiring of Dixons CEO to run Apple Retail Stores – January 31, 2012
Apple hires Dixons CEO John Browett as new retail chief – January 31, 2012
Burberry to outfit retail staff with Apple iPads in China stores – April 13, 2011

20 Comments

  1. “The bad news for Apple Retail was that Apple went a year before hiring a new senior vice president of retail (and online stores) and this helped contribute to its revenue only growing by 8% year-over-year in the first nine months of FY 2013”

    Really? That was the reason?

    I disagree. Apple’s Retail revenue only grew 8% because Tim Cook switched from Oatmeal to Raisin Bran for breakfast and his bowel movements were off by a half hour, causing him to miss important meetings with his Retail executives.

    1. If I understand where you’re coming from then I agree. The article talks with such certainty about things that are nothing more than loose correlations. (And I don’t mean to enable your potty talk with my use of the word “loose” in the previous sentence.)

      The fact that Ron J went to JCP and pretty much failed tells me he might have just been a flash-in-the-pan at Apple. To assume the incoming Burberry exec. is going to be some kind of magic bullet for Apple is really reaching. I hope it works, but only time will tell.

  2. I think she will do well. She and the other two high end hires are going to separate Apple from the crowd. Making it even more fashionable to own something from Cupertino. Smart phones will eventually become commoditized so it will take something special other than only new features to draw a crowd. “Class”. Apple will have class. Not that they don’t now, but it will be taken to a new level. As long as it is done carefully it should put the other guys in their place. A distant second place, third-place, fourth place etc.

    1. Savvy hire IMO. Per GM’s comments, let’s just hope that “image” or becoming fashionable for fashion’s sake won’t be on the to-do list.
      If this mindset slips in at any expense of making the best product, the hire will cost more than benefit.

  3. IF there was anything that I would say had worried me about Apple, the hiring of a guy who worked at Dixons would be it. Yes, it can be argued that good people can work for bad companies, but if you’re in any level of power there should be some indication that you’ve done a good job – especially when you’re being hired for a retail related position from a company whose business is retail! Dixons was just appalling.

  4. The retail stores should not be looked at as a huge high profit margin business in the first place. Don’t make it a electronic store to sell a ton of crap… SJ vision of the Store is to be an Apple Experience for people. Not a bargain basement retail experience with sales people hammering to get you to buy stuff. The people working there should be Apple Fans also that just happens to work there.

  5. One used to be able to go to the Apple store and discover, try and buy all kind of cool stuff for Macs. Now it’s a hipster hangout for clueless people who cannot use their iPhones or prefer to stand in line over ordering online.

    The employees at the Apple Store used to know the products- not any more. Apple Retail employees are cast for image- not hired for their knowledge.

    1. Narrow view and wrong in my opinion, respectfully. My experineces differ.

      I tend to ask tough questions when I go to the Apple Store because it means I wasn’t able to easily find an answer myself or online. The AS staff have often had the answer before I get to the Genius bar. I can’t remember the last time a Genius wasn’t able to fix a hardware fault or give me a fix or a good clue on the software side.

      Lots of the staff run other types of sideline home business as I’ve found out from photography to video to graphics and music.

      I often try to preview new software on their various hardware on the tables to get a hands-on when they first come out & it is very enlightening (& cheap) to do it that way.

      Apple Stores no longer carry as much 3rd party stuff as early on, but they don’t have to, given the large amount of stuff existing and limited space, plus people ordering online.

  6. This will be interesting to see how Angela does at Apple. I think she “gets” technology. While at Burberry she was very close with Marc Benioff of Salesforce.com. She was instrumental in them adopting the Salesforce technology platform.

    Good video link below. Sharp lady. Sounds like she certainly understanding branding in the digital age. Will be interesting to see what she does with iBeacon in the Apple stores to set an example for other retailers.

    http://www.salesforce.com/customers/stories/burberry.jsp

    1. That video tells a lot about this woman. Take out “Burberry” and replace it with “Apple”, and it looks perfect!

      The woman gets it in so many ways, one might wonder what would have happened if she were there from the beginning instead of Ron Johnson. Obviously, it was different back then, and Johnson did the most spectacular job of elevating the brand value with retail, but judging by the level of respect this woman has for brand value, customer loyalty, customer experience, customer service and ways to protect it, I can’t think of a person who would fit better.

      If Steve Jobs were alive today, he would most likely totally love her ideas.

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