TMT legal update: Apple brings Burberry chief on board to lead their retail revitalisation

• Technology
• Retail - E-briefings
• Technology, Media and Telecoms - Technology

05-11-2013

Précis   

Apple have appointed Burberry’s current CEO, Angela Ahrendts, to the long vacant position of retail chief. Ahrendts had held the role of Burberry’s chief executive for almost a decade, and has been given much of the credit for turning the iconic British company into a recognised, global brand.

What? 

Ahrendts will move to Apple’s Cupertino headquarters in the middle of 2014. She succeeds John Browett, also British, who was the former head of Dixons. The appointment of last year’s highest paid UK CEO is being viewed by many as an attempt to bring in an experienced executive to lead the Apple retail and online stores strategic direction, expansion and operation with a particular focus on emerging markets, brand development and protection and digital innovation in the bricks and mortar stores. Under Ahrendts’ leadership, Burberry’s market value increased from £2.1 billion to £7 billion. Tim Cook, Apple’s CEO, has stated that Ahrendts “shares Apple’s values and our focus on innovation, and she places the same strong emphasis as we do on the customer experience”.

So What? 

Ahrendt’s appointment is a further example of the increasingly strong relationship between current trends in retail (including fashion) and technology. Apple is reported to have been attracted by the way that, under Ahrendt’s tenure, Burberry stores led the way in digital innovation. Burberry’s flagship store on Regent Street has been given much press for its mirrors that transform into screens using microchips hidden in the clothing, so that customers trying on clothes can see videos of the items being made and clips from fashion runways.

This is of course part of a growing trend we are seeing where our clients and companies in the sector are really focusing on the customer experience in order to drive sales revenue and differentiate themselves as leaders.

This has led to interesting contracting issues for those procurement teams of suppliers bringing in such new technology to support innovation as well as for those supplying companies either in the same sector or in other sectors. The contracts we are seeing are either more short-term or are needing to be more flexible in order that the latest technology can be delivered on short notice. This has led to some tricky issues around deal shape and the contract supporting that deal. As innovation is currently king, it will be interesting to see if an industry-norm contract begins to be developed for these more innovative and short-term deliverables.