Cheerio macs, hello Macs as Ahrendts quits Burberry: Burberry's share price dives after chief executive resigns to take up post at Apple
(Guardian (UK) Via Acquire Media NewsEdge) 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.
Ahrendts, who was the highest-paid chief executive in the FTSE 100 last year with a pay package of almost pounds 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.
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.
Yorkshire-born Bailey and Ahrendts, a US fashion executive from Indiana, have worked closely together since her arrival in 2006. 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.
Ahrendts is moving to a demanding job as Apple's status 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.
The last person to run Apple's retail empire was also hired from the UK. Former Dixons boss John Browett, was handed a "golden hello" reported to be worth $56m (pounds 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.
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 pounds 6.2m and will receive another tranche worth pounds 7.34m next month. Meanwhile, Ahrendts is working beyond her six-month notice periodto collect a bonus worth up to double her pounds 1.1m salary as well as shares worth pounds 6m.
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."
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."
Burberry shares slumped nearly 8% as investors worried that Bailey would struggle to run a pounds 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.
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 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.
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.
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.
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.
Christopher Bailey, Burberry's creative director, is to stay in his current job as well as taking over the chief executive post
Angela Ahrendts was the highest paid chief executive in the FTSE 100 last year with a total pay package of almost pounds 17m. She is expected to at least double her income at Apple
Photograph: Gareth Cattermole/ Getty Images
(c) 2013 Guardian Newspapers Limited.
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