Can anyone be worth $28m in a single year? Burberry obviously thought that its CEO Angela Ahrendts was deserving of the package for her work in FY 2012, a year which saw Burberry achieve $3.3 billion in sales and $717 million in profit. The brand’s share price has trebled since Ahrendts joined Burberry in 2006 and set about turning a “dusty old trench coat company” into a fashion icon for the times.
Along the way, the 53-year-old small-town American girl successfully leveraged what I see as the three forces affecting retail today – Globalisation, Digitisation, Polarisation. She turned Burberry into a global force focused on millennials, expanding the brand in emerging luxury markets like China. Ahrendts seized upon digital technology, driving Burberry via social and mobile media, and flipping the idea of a physical store on its head with the aim of making customers feel like they had “walked into a website”. And she pushed Burberry towards the premium end of the market in a move that was counter intuitive in the midst of the global financial crisis, but right on trend.
And now Ahrendts has caught the eye of Tim Cook, CEO of the world’s most valuable brand (according to Interbrand), Apple. As of the North American Spring, Ahrendts will leave London for Cupertino, California and take on the job of Senior Vice President of Apple’s retail and online stores. Ahrendts will also join Apple’s 10-member executive team as the sole female.
O.K., so you caught me out on the headline of this article. Yes, it is indeed a massive overstatement to call Ahrendts “the new Steve Jobs”. But she is definitely “the new Ron Johnson”, the guy who put the Apple Store on the map and introduced innovations such as the Genius Bar and hand-held mobile checkouts. (All that of course, before Johnson moved to US department store JC Penney and stumbled badly trying to turn it around.)
And this does feel to me like a significant moment in the recent history of retail. Ahrendts’ hiring underscores how fashion and technology are becoming one*; how important a global perspective is for retailers today; and how retail must be reframed for a Gen Y shopper. As Ahrendts said herself on LinkedIn; “we are all at an incredible inflection point today – living and working in fast-moving, digitally-driven and globally connected societies where change is constant and we must thrive in ambiguity.”
Ahrendts brought what she calls “the power of human energy” to transform Burberry. Let’s see if lightning can strike twice at Apple. I can’t wait to see the $28 million woman go to work on Apple’s $100 billion brand.
*Footnote: interestingly, Ahrendts is Apple’s second “fashion” hire this year, after bringing on board Paul Deneve, the former CEO of Yves St. Laurent, for “special projects”.