Apple's brick-and-mortar stores are among the most lucrative in the world. Now the company is trying to make its online stores just as successful, and with a dash of style from the high fashion world.
On Tuesday, Apple said it had hired Angela Ahrendts, who transformed Burberry from a faded British icon into a symbol of global luxury. Her new job: to reshape Apple's physical and online retail efforts so that they are both equally admired.
"I have wanted one person to lead both of these teams for some time," Timothy D. Cook, Apple's chief executive, said in an internal memo to employees that was leaked on the Web, "because I believe it will better serve our customers, but I had never met anyone whom I felt confident could lead both until I met Angela."
Apple's more than 400 retail stores have been instrumental to the company's success. With a minimalist design and sites in far-flung places like Shanghai and Rome, the stores have become both a retail and marketing channel for the company.
In the past few years, Apple has added many upgrades to make its stores more high-tech, like the ability to pay for a product with an iPhone. But its online store has not changed much - Apple usually brings the store offline temporarily whenever it adds new products, an approach that seems dated.
Ahrendts will probably be expected to make shopping online and in stores more seamless and help make the customer service experience similar whether consumers are walking in or logging on to an Apple store.
She will bring with her a deep knowledge of retailing. Under her watch, Burberry put technology in the forefront of its brand strategy. The company established a strong presence on Facebook and other social media and built a unified experience for its online marketplace and store.
People in the fashion industry credit Ahrendts with expanding Burberry into an international fashion brand while maintaining its heritage and said Apple could use some of that magic.
"It's about being able to tap into trends - not just fashion trends, but what people want in their lives, what they're talking about - while maintaining a sense of the brand," said Simon Ungless, director of fashion at the Academy of Art University in the San Francisco area, who has worked for designers like Alexander McQueen. "I think that's what she's done at Burberry very well, and that feels like something they've lost at Apple."
Ahrendts, 53, was raised far from the runways. She grew up in Indiana and graduated from Ball State University, also in Indiana. She eventually found her way to the fashion industry and started rising up the executive ranks, becoming Burberry's chief executive in 2006. As Burberry's fortunes rose, so did Ahrendts' profile.
That profile could grow even larger at Apple, one of the biggest companies in the world - and one of the most closely followed. She will be the only woman on Apple's executive team, and some analysts on Tuesday speculated that she could be an eventual successor to Cook, although he is not expected to leave anytime soon.
Ahrendts, who joined Burberry from Liz Claiborne, is Apple's second big hire from the fashion industry this year. In the summer, Apple hired Paul Deneve, the former chief executive of the French fashion house Yves Saint Laurent, to work on special projects.
Silicon Valley has long had its eye on fashion and the industry's success at selling an image. And the push by technology companies into so-called wearable technology, like Google Glass and Samsung's smartwatch, has only intensified that interest. When models wearing Google's eyewear walked the runway at Diane von Furstenberg's show in New York this year, it became obvious that the connection was lasting.
The hiring of Ahrendts increased expectations among analysts that Apple would expand into wearable technology, including perhaps an Internet-connected wristwatch.
"Everyone in the market is seriously thinking about wearable technology," said Jez Frampton, global chief executive of Interbrand, a consulting group. "Tackling the fashion markets requires a different skill set than the tech sector."
Ahrendts' recruitment to Apple's senior management will help the company reassert its reputation as a global luxury brand. Before she took over Burberry, the company and its clothes and accessories had become increasingly associated with low-end retail customers. By adapting Burberry's image to a youthful style but one that never jettisoned the core clothing, the brand was repositioned as "affordable luxury."
That branding strategy could be useful for Apple in a time when it is dipping its toe into lower prices, with a cheaper plastic iPhone and the lower-cost iPad Mini. While Apple is increasingly associated with high-end brands like Gucci and Ferrari, analysts warn that the US tech company also must expand into the wider consumer market where it increasingly faces competition from the likes of Google and other manufacturers of low-cost Android phones.
"This represents a strategic shift," said David Godber, global chief executive of the brand design consultancy Elmwood in London. "Tim Cook wants people in his team that are capable of shifting Apple from a technology innovator to a luxury lifestyle company."
Ahrendts will partly be filling a role once held by John Browett, who had a short-lived stint in charge of Apple's retail business before a prominent firing last year. Browett had run the British low-end technology retailer Dixons, and he left Apple after less than six months. Analysts said his efforts to cut costs at Apple's stores did not fit with the company's overall strategy, and Apple publicly apologized for a plan by Browett to cut back on staffing at its retail outlets.
Browett took the position at Apple after Ron Johnson left to become chief executive at JC Penney. Although he was considered a great success at Apple, Johnson quickly ran into problems, and he left this year after just 17 months in the job.
The physical stores have helped Apple's bottom line. On average, each store brings in around $13 million in revenue every three months, or roughly double the comparable figures for the luxury jewelry brand Tiffany & Co., according to the research firm Asymco. Apple earned just under $4.1 billion from roughly 84 million visitors to its retail stores in the three months through June 30.
"Apple is a rarity as a retailer," said Liam Hamill, strategy director at the brand consulting firm Venturethree in London. "Its stores aren't merely designed to sell products, but to give a halo effect to its brand."
