This year, Gilles Auguste and I co-authored the book 'Luxury Talent Management', published by Palgrave Macmillan. Two of the subjects we approached were the combination Designer / CEO, accounting for the success of certain luxury brands (such as Burberry), and the challenges facing retail. It turns out that both these subjects are at the core of the recent changes in the top echelons of Burberry. We offer you an analysis.
The print and internet media have amply commented on the departure of Burberry's President who left for Apple - to take up the post of VP in charge of its stores and e-commerce networks. We would like to throw some light on two other aspects that seem essential:
Christopher Bailey was appointed CEO of Burberry - and combines this function with his current role as Creative Director (CCO). Many critics were surprized, and expressed doubts about this 'unusual' choice. However, it is not the first time that such a combination has occurred: the most recent being at the beginning of 2013, when Nicolas Bos, until then CCO of Van Cleef & Arpels (and CEO of Van Cleef & Arpels, North America), became the CEO of the jewellery brand, replacing Stanislas de Quercize who left to manage Cartier. He combines this office with that of Creative Director. We think very interesting that two important brands amongst the most creative, chose a new management model, where the architect of the brand's success takes over the reins. To us, this shows the increasing importance of design and creation in the development of luxury brands - with the arrival of a new generation of creators perfectly aware of the business and capable of creating products that sell extremely well. It is perhaps important to point out that Christopher Bailey's arrival at the head of Burberry was preceded by John Smith's appointment as COO of the brand. He is not a stranger to the company. As a member of the Board since 2009, he is fully aware of its ins and outs. Furthermore, hailing from the BBC, he knows the media very well – we are reminded of what Christopher Bailey said recently: "Burberry is now as much a media-content company as we are a design company because it’s all part of the overall experience".
Angela Ahrendts thus leaves for Apple to handle its network of boutiques and e-commerce. The creation of Apple stores in 2001 was one of essential elements of Apple's new business model - too often taking a backseat to its products and design and technological innovation. The Apple stores were a real revolution in the world of retail, introducing large, non-commercial spaces, offering 'hands-on' products, making service an essential element of its concept. Today, more than 18% of the brand's sales are made through this channel, and sales per square metre are equal to those of … the best luxury brands (46,000 €/sq. m). A large number of luxury brands are unable, in spite of their efforts, to offer a client experience like that of Apple. However, this concept has not changed for over 10 years, and it needs to evolve. In a recent interview, Tim Kobe, founder of the design studio, Eight Inc., who developed the Apple Store concept with Steve Jobs, was very critical of them: "Apple's momentum has slowed down... It's imperative Apple shifts again. They should really refresh [their retail offering] every five years". He argues rightly that a retail concept, no matter how powerful it is, needs to be revisited every 5 years at the risk of losing its advantage. And the Apple Store concept has not changed in the last 10 years. We can thus assume that one of Angela Ahrendts's tasks will be to give it an overhaul. Recently, she often spoke about the future of retail, explaining how important it is for online and offline experiences to be "seamless". Apple is already well advanced in this domain, but a lot of progress still has to be made. We can reasonably think that she will be its architect.