Apple hands its retail empire to fashion veteran

Oliver Smith
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APPLE’s appointment of Burberry’s Angela Ahrendts as head of its retail and online stores is much more than just another hire for the technology titan.

Apple’s retail business is an empire in itself, making revenues of $6.4bn (£4bn) in the first quarter of 2013 – making it just under half the size of Amazon’s entire $13.2bn business, despite stocking only a fraction of the products.

Since its retail rollout began in 2001 Apple has opened 408 stores around the world across 13 countries.

While some doubted Apple’s ability to compete in the retail space – in 2001 one marketing expert said, “I give them two years before they’re turning out the lights on a very painful and expensive mistake” – the stores have turned into a crucial part of Apple’s strategy.

As a standalone division, Apple’s retail arm posted revenues of more than $4bn in the three months to the end of June, a traditionally quiet period. The success of Apple stores has enabled its tremendous quarterly sales of iPhones ($18.2bn) and iPads ($6.4bn).

Apple’s stores are also the most lucrative retail destination in the world, last year taking $6,050 in sales per square foot in the US, double Tiffany and Co’s $3,017 per square foot.

Apple chief executive Tim Cook in a memo to employees yesterday on Ahrendts appointment said: “Angela has shown herself to be an extraordinary leader throughout her career and has a proven track record. She led Burberry through a period of phenomenal growth with a focus on brand, culture, core values and the power of positive energy.”

Cook will certainly be hoping that Ahrendts works out better than her predecessor.

Apple’s head of retail role has remained vacant for a year since former Dixons chief John Browett was fired last October after less than six months. Browett was handed a £36m bonus on taking the Apple job last May, more than double Ahrendt’s total £16.9m salary package last year.