What will Angela Ahrendts’ departure mean for Apple’s retail business?

Discussion
From left: Deirdre O’Brien, Tim Cook, Angela Ahrendts - Photo: Apple
Feb 06, 2019
George Anderson

Angela Ahrendts, senior vice president of retail for Apple, is leaving the company in April. She is departing Apple roughly five years after joining the company from Burberry where she held the CEO title for eight years.

Apple issued a statement that said Ms. Ahrendts was leaving for “new personal and professional pursuits.”

As Ms. Ahrendts  departs Apple, the company continues to generate more sales per square foot than any other business in retail. Under her leadership, Apple sought to make its stores more entertaining and inviting places to visit. It was all part of Ms. Ahrendts’ strategy to recreate Apple’s locations as community hubs. The company even dropped the word “store “from its banner as part of the strategy.

She frequently spoke about associates in Apple’s stores being trained to not sell technology to customers, but to share with them how technology can be used to enrich their lives in various ways.

“I want to thank Angela for inspiring and energizing our teams over the past five years,” said Apple CEO Tim Cook in a statement. “She has been a positive, transformative force, both for Apple’s stores and the communities they serve.”

Today, Apple operates 506 physical locations around the globe as well as 35 online stores.

Apple was quick to name a replacement for Ms. Ahrendts in the person of Deirdre O’Brien, who has been named senior vice president of Retail + People, reporting to Mr. Cook. In addition to her retail duties, Ms. O’Brien will continue to be responsible for the company’s human resources.

“People come to Apple to do the best work of their lives, and our retail teams show their passion every day, in every interaction, all around the world,” said Ms. O’Brien in a statement. “It is the opportunity of a lifetime to work with, and learn from, such a talented, diverse and imaginative team. I am looking forward to this journey, and to continuing the important work of the People team in supporting all of Apple’s amazing employees.”

“We believe our soul is our people, and Deirdre understands the qualities and strengths of our team better than anyone,” said Mr. Cook. “For more than three decades, she has helped keep Apple focused on serving customers and enriching lives. She’s an exceptional leader and she’s been a vital partner to our retail teams around the world since the very beginning.”

DISCUSSION QUESTIONS: Do you have any concerns about Apple’s retail business with the departure of Angela Ahrendts? What advice do you have for Deidre O’Brien as Apple moves into the future?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"Her departure is a loss. However, I don’t have concerns about Apple’s stores per se because of it."
"Ahrendts’ (relatively) subordinate role at Apple probably had her somewhat hamstrung and she was being challenged to push through barriers in a maturing business."
"Apple sales are down. Maybe the “we don’t want them to sell” mantra needs to move on as well."

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18 Comments on "What will Angela Ahrendts’ departure mean for Apple’s retail business?"


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Mark Ryski
BrainTrust

Interesting move. It’s hard to imagine what would cause a seasoned pro like Ahrendts to leave the most valuable company in the world. As good as Ahrendts is, Apple transcends any one person, including Steve Jobs, so I don’t believe her departure will be especially problematic. Apple’s new retail leader is an unknown quantity, but what seems to be clear from the article is that she is close to Tim Cook. My advice to O’Brien – you just took over one of the most successful retail operations of all time…don’t mess it up.

Brandon Rael
BrainTrust
For the company that redefined what a retail store experience could be, and established their stores as a town center, a place to connect, experience and build connections, Apple perhaps is in need of some new inspiration as the innovation curve continues to climb upwards. Even with the departure of Angela Ahrendts, which was somewhat of a surprise, Apple is challenged to diversify their product, service and retail offerings, as the iPhone sales have started to stagnate. With that said, Apple remains an extremely dominant global presence, and their retail stores are their prime media locations to connect with existing and new customers. For Apple and Deidre O’Brien, now is not the time to stop taking risks, driving new innovations and in-store experiences. Apple has a prime opportunity to entertain, engage and personalize experiences for each of their customers. Nike’s House of Innovation and the Starbucks Roastery both in NYC, along with the Gucci Garden in Florence Italy among many others have taken the customer-centric model that Apple started with, and took it to the… Read more »
Lee Peterson
BrainTrust

I don’t see her departure making that much of a difference. It was really Ron Johnson who set the tone and got the flywheel going for Apple retail. She said some great things to the press and some nice tweaks happened in store, but overall, for her and whoever takes over from here, the table has been set for a great experience. Would be hard to screw that one up.

Neil Saunders
BrainTrust

Apple is a fantastic business but, let’s be honest, this role was fairly restrictive for Ms. Ahrendts. Apple has a relatively limited number of stores, all of which are very standardized. There is a limit as to how much they can be evolved. Ms. Ahrendts has done a great job of creating a future store template, but now that it is done she needs space to exercise her other talents such as branding and marketing – all things outside of her remit at Apple.

Her departure is a loss. However, I don’t have concerns about Apple’s stores per se because of it. The company’s current weakness is in products, not where they are sold.

Kai Clarke
BrainTrust

This departure shows that Apple is not ready for the next step. Naming your HR leader to also lead retail sales in a transformative time for both Apple and the technology that has changed their company is not a well thought-out plan. Apple needs their HR team to focus exclusively on HR. They need a dedicated retail team, lead by focused retail management to move forward with their retail and store strategy for the future. Combining this leadership is just too much for one person, and a poor decision on Apple’s part. Where is the retail experience that Ms. O’Brien brings to this function of Apple?

Bob Amster
BrainTrust

Apple will continue to thrive and lead retail’s sales-per-square-foot statistic. The company’s retail operation grew under Ron Johnson and evolved under Angela Ahrendts. The company appears to have its own DNA by which these management changes appear to go smoothly to the outside world. No reason to fear a change for the negative.

Art Suriano
BrainTrust

Angela Ahrendts made a contribution to Apple as so did Ron Johnson. She will be missed but Apple has a strong culture, and they will be fine. The stores are successful because Apple figured out a long time ago it’s all about the experience and Apple has become the master of delivering a great experience every time. The associates never pressure a customer to buy anything, and yet they are available almost immediately when you need assistance. It’s true you’ll wait in line for tech support which is why it’s best to make an appointment, but when it comes to buying a product, you can get what you need faster than any retailer and pay for it without having to go to a register. Apple understands what their products mean to their customers who are loyal and swear by the brand. It’s a win-win relationship for the retailer and customer and without Angela Ahrendts none of that will change.

Cathy Hotka
BrainTrust

It’s never a good day when the person in charge of retail store experience is replaced by the head of HR. What on earth are they thinking? For Apple to continue to evolve, it needs a retail pro who can challenge the status quo and create new buzz.

Ricardo Belmar
BrainTrust

The departure of Angela Ahrendts, while disappointing in some ways, is unlikely to have any lingering negative impact on Apple’s successful stores and how their loyal customers perceive their value. Apple customers view those stores as a shrine to the brand, in many ways due to Angela’s continued evolution of what Ron Johnson started. I don’t see that changing, and if you read between the lines of the announcement, it does not sound like Apple intends for Ms. O’Brien to make any drastic changes. That said, Apple really no longer holds the crown for the best in-store experience in light of new stores like Nike’s House of Innovation, Starbucks Reserve Roastery, and RH’s flagship in NY. While I don’t see Apple losing their status of highest sales per sq ft (let’s be honest, their products are expensive which gives them an advantage in this metric) they should consider how to re-energize that store experience to better promote their products lifestyle experience that their customers crave and expect.

Shelley E. Kohan
BrainTrust

Apple seems to transition well through departures of their highly seasoned top talent. I will be excited to see where Ms. Ahrendts goes next as it will most likely be a company where the breadth of her skills can be fully utilized. For the current state of business, I would only caution having the top retail person running HR simultaneously may be too large of a responsibility for continued focus on the retail growth. While having HR report to the head of retail can make sense, there should be a key person replacing the HR role.

Dick Seesel
BrainTrust

The “genius” of Ron Johnson was overstated (as his J.C. Penney experience showed), and the working of the Ahrendts announcement suggests some trouble in paradise. But in truth, Apple’s retail business is only as strong as its product line. It’s still an enjoyable environment and experience, but the company hasn’t launched a breakthrough product since the iPad and its yearly tweaks to the iPhone aren’t driving sales.

Bob Phibbs
BrainTrust

Apple sales are down. Maybe the “we don’t want them to sell” mantra needs to move on as well. Clearly, stores are not important if they can be shoved in with HR.

Tom Dougherty
BrainTrust

Apple will survive. But they have bigger problems right now. It is not who leaves that challenges Apple’s dominance. It is the WHY. There was a time when no one in their right mind would leave. Today, Apple is no longer the ultimate destination.

Gene Detroyer
BrainTrust

The title ” senior vice president of Retail + People” says everything about Apple’s future retail business.

Brian Kelly
Guest
6 months 18 days ago

From the Vogue Business article, “The iPhone generated 62% of its $266 billion in sales last year. ‘In retail, the phone is not our largest category,’ says Ahrendts. ‘We are actually number one in the company for Mac.'” Seems to me the cost to operate these stores is distorted to revenue. Sounds like the store phone business is underdeveloped.

The cost of flagship stores can be amortized across the portfolio, but when there are so many flagship stores, the model isn’t relevant to retail revenue even if its blended. Yeah, a channel thing, who gets credit for the sale?
Is the HR person now in charge because of pending major restructuring?

I had such high hopes for Ahrendts. Like Johnson at J.C. Penney. Or time will tell for Gass. We love futurists and radicals, their visions are so exciting. And in the morning a key goes in a door and it’s open for business. Will mass retail reality match the digital dream?

Retail ain’t for sissies!

Carol Spieckerman
BrainTrust

Angela Ahrendts was a big get but she also was a very big ticket. No doubt she ignited some new thinking but her replacement would seem to signal a retreat from the promise of retail reinvention at Apple. Ahrendts’ (relatively) subordinate role at Apple probably had her somewhat hamstrung and she was being challenged to push through barriers in a maturing business. Should Ahrendts choose to continue her retail career trajectory, she should be at the top of the list of potential CEOs.

Harley Feldman
BrainTrust

The only concern with Ms. Ahrendts’ departure and Ms. O’Brien’s ascendance to the position is O’Brien’s knowledge and skills in the retail market. Ms. Ahrendts came from a high-end retailer and O’Brien may be learning along the way. Having said that Apple has a culture which extends way beyond one person.

In the future, Apple Retail will need to evolve as its products do. More of Apple’s revenue will come from services with less reliance on the hardware. Apple Retail will need to attract consumers interested in their services rather than just the shiny objects they have in the stores.

Carlos Arambula
BrainTrust

The Apple brand is currently bigger than any individual leader. So long as the culture remains true to its brand and core customers Apple will continue to thrive.

wpDiscuz
Braintrust
"Her departure is a loss. However, I don’t have concerns about Apple’s stores per se because of it."
"Ahrendts’ (relatively) subordinate role at Apple probably had her somewhat hamstrung and she was being challenged to push through barriers in a maturing business."
"Apple sales are down. Maybe the “we don’t want them to sell” mantra needs to move on as well."

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