It would be impossible to imagine a more sensational headline than the one that exploded from the Burberry news bazooka on Tuesday morning (15 October). I read the story, rubbed my eyes and read it again. Then I read a bit more and rubbed my eyes again. The whole thing was astonishing.
The news that Angela Ahrendts was stepping down from Burberry was one thing. Nobody saw that one coming. Then there was her chosen destination – Apple. And finally there was the news of her replacement. Christopher Bailey the Chief Creative Officer will replace her!
The combined news throws up a Catherine Wheel of questions and implications. Here are the most immediate.
Was She Pushed?
Ahrendts might have been at the helm for eight years but she is only 53 which makes her a baby in chief executive years. Why “exit stage left”, to use her phrase, with so much potential still left in the immaculate Burberry bag? She was the highest paid, best regarded and most famous CEO in the UK. Her performance at Burberry was exemplary. So it seems unlikely that Burberry wanted her to go, and more likely she has jumped.
Why jump to a lesser role?
Any which way you spin it – her new role as the senior vice president with oversight of Apple Retail, Online Stores is a big step down. Yes, she is rightfully proud of Burberry’s evolution in both retail and digital terms and, yes, this is Apple we are talking about. But it’s rare that a CEO ever relinquishes the overall leadership role no matter how big the company that comes calling. Has Ahrendts been promised the CEO position of Apple once a suitable handover period with Tim Cook has been executed? It would seem the only likely explanation for her move.
What about Paul?
The one snag in all this is a delightful chap called Paul Deneve. Barely three months ago Deneve stepped down from his own super successful stint as a luxury brand CEO, this time at Yves Saint Laurent, to become a vice president of “special projects” at Apple. Now there are two big names from fashion/luxury presumably staring at each other from across their cubicles at Cupertino. Both bring similar skill sets. Both clearly came to establish themselves as top dog. Both must have fancied the top job when they announced their respective moves. Ouch.
Apple is going to be run as a luxury brand
To understand why Apple hired Ahrendts, or Deneve for that matter, you have to first understand the true nature of luxury brands. Luxury brands usually emerge from innovative new categories, they have astonishingly gifted and influential founders, usually exhibit a strong prevailing ability for creativity and disruption and maintain a remarkable ability to build their mythology though secrecy. Apple is 37 years old and transitioning from a young tech company to a luxury brand. Clearly the Apple senior executive is aware of this and their impending inability to retain a leadership position simply as a tech firm. They are speeding their luxury evolution by recruiting executives with the ability to manage big brands at the intersection of creativity, luxury and tech.
What about Christopher Bailey?
This is the most amazing part. Trust me. Most journalists that report the story will focus on Ahrendts and her move to Apple. But the truly amazing part of all this is the promotion of Christopher Bailey to the CEO position. In most luxury brands there is a so called “partnership model”at work in which the CEO shares most of the limelight and power with a creative director. The two forge a vital personal and professional link and the success of the brand depends on them both equally. Karl Lagerfeld and Maureen Chiquet at Chanel.
Yves Carcelle and Marc Jacobs at Louis Vuitton. Domenico De Sole and Tom Ford at Gucci. These are legendary partnerships and the Ahrendts/Bailey era was rapidly becoming recognised as another. The idea he would then step up and across to the CEO position is literally unheard of. Never in the annals of modern luxury branding has a creative director taken the reins as CEO to my knowledge.
What Does this mean for Burberry?
I hate to be negative but the risks inherent in this move far outweigh the potential rewards. For starters your amazing chief creative officer is now no longer able to devote himself to creativity and design. Then there is the thorny question of whether a (brilliant) designer can actually run the business. It would be impossible to imagine Ahrendts designing the last ready to wear collection for Burberry. So why is it any more acceptable to imagine a creative director running the commercial side of things.
Like I said, Holy Shit!