Shares drop as Burberry announces CEO Ahrendts' exit

Shares have dropped five per cent this morning as fashion heavyweight Burberry announces its chief executive officer (CEO) Angela Ahrendts will step down by the middle of next year to take up a new position with Apple. It has also reported, in a separate statement, total revenue for the six months to September of £1,031m - up 14 per cent - with retail revenue up 17 per cent at £694m. Ahrendt's exit will means that only two FTSE100 CEOs are women, down from a peak of five. (Release) (Release)

Ahrendts will be replaced by current chief creative officer Christopher Bailey, who will be appointed chief creative and chief executive officer. The pair continue to work closely with the senior executive team. Bailey commented: "We have a clear strategy to build on... Together, we will continue to push the boundaries of design, technology and communication while never forgetting our heritage, our Britishness and our values."

Apple have said that Ahrendts will be joining them in a newly created position: senior vice president and member of the executive team. In a statement, the company said she "will have oversight of the strategic direction, expansion and operation of both Apple retail and online stores", adding that Apple stores have "redefined the shopping experience for hundreds of millions of customers" worldwide, setting the standard for customer service. Chief executive Tim Cook commented that Ahrendts "shares [Apple's] values and our focus on innovation, and she places the same strong emphasis as we do on the customer experience. She has shown herself to be an extraordinary leader throughout her career and has a proven track record."

Ahrendts said, “I have always admired the innovation and impact Apple products and services have on people’s lives and hope in some small way I can help contribute to the company’s continued success and leadership in changing the world.” Of Burberry, she commented that the company is "in brilliant shape", emphasising its prowess as a digital global retailer with "a world class supply chain, state of the art technology infrastructure… and one of the most closely connected creative cultures in the world today."

Sir John Peace, Burberry's chairman, said of Ahrendts successor that he has "no doubt that Christopher's vision and leadership, with the excellent management team in place, will keep Burberry on the forefront creatively, digitally and financially, creating further value for shareholders in the next exciting stage of our evolution."

The first half of 2013 was marginally ahead of guidance for Burberry; its strong brand gained momentum and its online business continued to outperform in all regions over the six month period, with outerwear and large leather goods driving half of its mainline growth. Wholesale revenue was down seven per cent at £244m, with the second half of the year expected to hit high single-digit growth, excluding Beauty - which, the company anticipates, will see full year revenue of £140m.

The male fragrance Brit Rhythm saw a successful launch last month, and the company has seen continued growth in store numbers, with 14 opening over the period. Digital collaboration is progressing, too, as Burberry Kisses were launched in partnership with Google.

Ahrendts comments that Burberry "expect[s] the external environment will remain uncertain and currencies volatile. Our team is united in focusing on delivering a compelling brand message and exceptional product and service to our customers over the all-important festive periods, while continuing the momentum around Beauty."