Angela Ahrendts’ Big Year At Apple

Just about a year ago, Angela Ahrendts captivated both the retail and tech press by her very high-profile decision to leave the CEO-ship at Burberry and take the helm of Apple’s retail efforts.

Ahrendts, during her tenure at Burberry, was regarded as a digital retail rock star. She more than tripled the number of standalone stores and turned back the tide of brand dilution that overly enthusiastic licensing of the brand made the norm in the years before her arrival. She embraced digital and social initiatives and amassed millions of followers on Facebook, even doing the unthinkable: streaming one of its fall runway shows on that platform. Under Ahrendts, sales rose from £743M ($1.1 billion)  in 2005 to £2 billion ($3.12 billion) in 2012 and the stock price jumped fourfold.

Which is why, on the one hand, many were surprised to find her ditching this pretty good gig to move her family halfway around the world to step into something that, at least from a title perspective, seemed like a bit of a step down: Apple’s SVP of retail and online sales. But then Ahrendts, a self-described small town Indiana girl (many people forgot she was born in the States) has spent much of her career surprising those around her with a kind of retail savvy that routinely cracks the code and not only attracts customers, but keeps them coming back.

In her new role, Ahrendts stepped into some big shoes. Ron Johnson held the job before her — and his efforts at developing the Apple Store into the often-imitated retail force it is today is often written about as visionary.

Of course, she stepped into a big year for Apple. The iPhone 6 (and 6 Plus) were released to record-breaking sales. The Apple Watch also made a big splash when it entered the market accompanied by weeks of waiting lists. The success there is less certain, with some analysts worried that the Watch is a bit more of a belly-flop than a cannonball from a consumer enthusiasm standpoint.

That aside, Ahrendts has already started to leave her mark at Apple.

Ahrendts’ Big Plays

After taking the helm in 2014, Ahrendts arrived just in time to find the marketplace’s enthusiasm over the iPhone 6 tip from “fever” to “madness” and has presided over a product launch so successful that Apple has asked suppliers to create between 85 million and 90 millions units of its next iteration (the 6S). That’s 10 million to 15 million more than its first production run. Some analysts report a mass defection from Android-powered phones during the first half of 2015, fueling that increase in production from suppliers.

Ahrendts also aggressively pushed expansion into the Chinese market — and will grow the iPhone purveyor’s store presence on the mainland to 40 by the end of 2016. Five stores have already opened – 10 will be open by the end of the summer of 2015.

Additionally, Ahrendts has been recruiting workers from U.S. Apple stores to move to China as she increases the tech company’s footprint there. Reports in Forbes indicate by early 2015, 200 retail employees had already relocated overseas.

Apple is currently the No. 1 smartphone brand in China, despite the fact that it cost nearly twice what its nearest local competitors Xiaomi and Huawei charge for their phones. Estimates early this year indicated that sales in China, Hong Kong and Taiwan for Apple products had jumped 70 percent year to year. The region brought in over 20 percent of Apple’s revenue in Q1 2015, and Ahrendts has made it clear she intends to continue pushing those figures upward.

Coming Changes

As with most every new executive transition, there were parts of Ahrendts’ first year that didn’t progress as smoothly as desired. Retail at Apple will not be repeating the Apple Watch rollout experience – one that had the product on display at the store – but only for sale online. That method reportedly created confusion and dissatisfaction for both employees and consumers.

There will be, however, an increased push to moving more of Apple retail traffic online as Ahrendts’ tenure rolls on.

“Angela has been trying to put a lot of focus on online integration into the store as well,” a person familiar with Apple’s retail plans told Business Insider.

“They want us to remind people that the Apple Store app is available and a great way to shop, but I think the adoption has been fairly slow,” a separate source said.

Under Ahrendts, Apple’s retail division is also pushing to upgrade the in-store retail experience — and is leaning on its third-party vendors to be part of that upgrade. According to a notice that Apple has sent to retail store employees, new packaging will soon appear on store shelves for accessories from a variety of brands that will be mostly white, include simpler fonts, higher-quality materials, and more consistent and compatible labels.

In short, if third parties want to sell their goods in an Apple store – they need to dress the part.

The Big Price Tag

Ahrendts may not be the most recognizable woman in tech, but this year, she will be the best paid – by far.

In fact, according to most reports, Ahrendts made more money than her boss, Apple CEO Tim Cook, did in 2014.

All in, Ahrendts snapped up $82.6 million in 2014, according to data compiled by Bloomberg. That money included a signing bonus and a make-whole grant for money being left behind at Burberry. The pay package in total is valued at an estimated $105.5 million, though Apple won’t discuss her compensation.

Tim Cook, by comparison, took in a mere $9.2 million, double what he brought in the year before. However, hold off on that Kickstarter campaign — he was paid $378 million when he took the helm at Apple in 2011, as well as a $372.6 million one-time stock award scheduled to vest through 2021. The value of the unvested shares currently exceeds $350 million.

Still, since negotiating a $100 million deal is something one more commonly hears about in conjunction with professional athletes as opposed to retail executives, Angela Ahrendts has certainly managed an impressive first year.

Impressive enough that the rumor mills are already starting to wonder if she will become Tim Cook’s natural successor?

Who’s to know, but we’ll be rooting for her.


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