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Christopher Bailey to Become Burberry CEO

Angela Ahrendts to step down from role.

LONDON — It's the end of an era.

Burberry Group said Angela Ahrendts would step down as chief executive officer by mid-2014 to join Apple as senior vice president of retail and online stores.

Christopher Bailey, who is currently chief creative officer, is to replace her and keep his current title.

Bailey has been at Burberry since 2001, and was named chief creative officer six years ago. He said he was "humbled to be asked to take on the CEO role at this company that means so much to me. I also feel privileged to be keeping my role as chief creative officer."

Sir John Peace, chairman of Burberry, said: “This CEO transition is a natural progression. The new beauty division is fully embedded and the Japan integration is well underway.”

Shares in Burberry slipped as much as 7.2 percent in early trading on the London stock exchange.

Ahrendts is the latest fashion executive to be plucked by the computer giant Apple. Paul Deneve stepped down as ceo of Yves Saint Laurent last July to become a vice president of the California-based company, working on special projects and reporting to Apple’s chief executive Tim Cook.

 

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Ahrendts' position is a new one, also reporting to Cook, who said, "She places the same strong emphasis as we do on the customer experience."

Apple said Ahrendts would be a member of the executive team, and have oversight of the strategic direction, expansion, and operation of both Apple retail and online stores.

In a research note, HSBC analysts Antoine Belge and Erwan Rambourg noted that the poaching of Ahrendts highlights the battle between technology giants and luxury brands for share of wallet — and management talent.
 
"While Christopher Bailey has proven to be a phenomenal designer, the jury will be out in terms of him running the company as CEO," they added.

 
In a separate trading statement, Burberry said that first-half revenues climbed 16.8 percent to 1.03 billion pounds, or $1.59 billion, reflecting double-digit gains in all regions, and high-single digit comparable growth in China. Dollar figures have been converted at average exchange rates for the period.

The company said retail sales in the first half increased by 20 percent, with comparable store sales growth making up 13 percent in both the first and second quarters, and the balance from new stores.

By region in the first half, there was double-digit comparable store sales growth in Asia Pacific and EMEIA and high single-digit growth in the Americas.

The company said that Mainland China delivered "high single-digit comparable growth" in the second quarter, in part reflecting more Chinese traveling luxury customers, while the rest of Asia accelerated through the half, and European flagship markets saw a higher proportion of tourist transactions.

Footfall remained soft offline, but grew online, Burberry said, while conversion improved in both. It said sales via iPads in store and “order on line, collect in store” both performed strongly.

Outerwear and large leather goods drove about half of the growth and men's tailoring continued to outperform, the statement said. Men's accessories also grew strongly.

 

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