Published: 15 Oct 2013
Last Updated: 18 Nov 2013
It’s out with the Burberry check and in with the white plastic for Angela Ahrendts, who this morning precipitated a 5% drop in share prices when she announced she’s leaving the British fashion house to take up a senior vice president position at Apple, reporting directly to chief executive Tim Cook.
Ahrendts, an American (and, incidentally, BFF of Black Eyed Peas singer Will.i.am – true fact), is credited with transforming the brand’s reputation from Z-listers’ favourite to one of the UK’s finest luxury exports, so no wonder shareholders aren’t happy.
When Ahrendts joined in 2006, she began the process of buying back 23 licenses Burberry had sold to other companies which, according to a profile by Vogue, meant other firms used its signature check on products including disposable nappies for dogs.
‘I felt like I spent my first few years here buying back the company – not the most pleasant or creative task,’ she told the magazine.
Since then, the value of the company has risen from £2bn to £7bn, and in the last five years share prices have risen by 461%. This morning, the business reported a 14% increase in sales to £1.03bn during the six months to September 30, with retail revenues rising 17% to £694m.
The company said today that when she departs in mid-2014, chief creative officer (and Ahrendts’ right-hand man for over a decade) Christopher Bailey will step up to the plate. But, despite a clutch of awards including GQ Man of the Year for Emerging Talent in Menswear, Designer of the Year at the British Fashion Awards and being credited as one of Forbes’ 10 most influential tastemakers in fashion, Bailey’s business acumen is yet to be tested.
Burberry finance director Carol Fairweather insisted he’s the man for the job.
‘He has been at Burberry for 12 years. Nobody knows it better than him. It’s a design-led business, with a creative leader at the helm.’
And just in case shareholders are still skittish: ‘He also has an incredibly sharp commercial mind.’
Ahrendts’ departure cuts the number of female chief executives in the FTSE 100 by a third: the only women left standing will be easyJet chief executive Carolyn McCall (incidentally the keynote speaker at MT’s Inspiring Women event next month) and Imperial Tobacco boss Alison Cooper. Although the Royal Mail’s Moya Greene may be about to enter those ranks sooner than we think.
Her tenure hasn’t been entirely blemish-free: last year, Ahrendts was the highest-paid chief executive in the FTSE 100, with a salary of £16.9m. The company also issued a profit warning last year after a drop in demand from China, which wiped more than a fifth off the company’s share price (although it’s gained more than 40% in the last year – so it wasn’t exactly a disaster).
What could the chief executive of a luxury brand want with a geeky tech company? Insiders reckon it’s to do with the company’s move into ‘wearable tech’, of which the rumoured iWatch will be the first product. An understanding of fashion is, apparently, as important as an understanding of tech (arguably not something Google took into consideration when it was developing the distinctly silly-looking Google Glass…) – although Ahrendts is pretty tech-savvy. Burberry was one of the first to live-broadcast its catwalk shows online. So iWatch this space...
Ahrendts, an American (and, incidentally, BFF of Black Eyed Peas singer Will.i.am – true fact), is credited with transforming the brand’s reputation from Z-listers’ favourite to one of the UK’s finest luxury exports, so no wonder shareholders aren’t happy.
When Ahrendts joined in 2006, she began the process of buying back 23 licenses Burberry had sold to other companies which, according to a profile by Vogue, meant other firms used its signature check on products including disposable nappies for dogs.
‘I felt like I spent my first few years here buying back the company – not the most pleasant or creative task,’ she told the magazine.
Since then, the value of the company has risen from £2bn to £7bn, and in the last five years share prices have risen by 461%. This morning, the business reported a 14% increase in sales to £1.03bn during the six months to September 30, with retail revenues rising 17% to £694m.
The company said today that when she departs in mid-2014, chief creative officer (and Ahrendts’ right-hand man for over a decade) Christopher Bailey will step up to the plate. But, despite a clutch of awards including GQ Man of the Year for Emerging Talent in Menswear, Designer of the Year at the British Fashion Awards and being credited as one of Forbes’ 10 most influential tastemakers in fashion, Bailey’s business acumen is yet to be tested.
Burberry finance director Carol Fairweather insisted he’s the man for the job.
‘He has been at Burberry for 12 years. Nobody knows it better than him. It’s a design-led business, with a creative leader at the helm.’
And just in case shareholders are still skittish: ‘He also has an incredibly sharp commercial mind.’
Ahrendts’ departure cuts the number of female chief executives in the FTSE 100 by a third: the only women left standing will be easyJet chief executive Carolyn McCall (incidentally the keynote speaker at MT’s Inspiring Women event next month) and Imperial Tobacco boss Alison Cooper. Although the Royal Mail’s Moya Greene may be about to enter those ranks sooner than we think.
Her tenure hasn’t been entirely blemish-free: last year, Ahrendts was the highest-paid chief executive in the FTSE 100, with a salary of £16.9m. The company also issued a profit warning last year after a drop in demand from China, which wiped more than a fifth off the company’s share price (although it’s gained more than 40% in the last year – so it wasn’t exactly a disaster).
What could the chief executive of a luxury brand want with a geeky tech company? Insiders reckon it’s to do with the company’s move into ‘wearable tech’, of which the rumoured iWatch will be the first product. An understanding of fashion is, apparently, as important as an understanding of tech (arguably not something Google took into consideration when it was developing the distinctly silly-looking Google Glass…) – although Ahrendts is pretty tech-savvy. Burberry was one of the first to live-broadcast its catwalk shows online. So iWatch this space...
