The boss of Apple Inc’s (NASDAQ:AAPL) retail division, Angela Ahrendts, has decided to leave the firm after five years in the role in an unexpected announcement that came after close on Tuesday.
The tech giant said Ahrendts, who oversaw a major overhaul of the company’s retail spaces that included an expansion of the network to over 500 stores, was leaving to pursue “new personal and professional pursuits” and would be replaced by Deirdre O’Brien, the current head of Apple’s human resources department, who would add retail responsibilities to her role.
READ: Apple hints at cutting iPhone prices to address sluggish sales after disappointing quarter
Ahrendts, who joined Apple in 2013 from luxury fashion brand Burberry Group PLC (LON:BRBY), was seen as one of the key drivers behind changing its brand from simply being an electronics company to a more luxury-orientated product.
She was also at the helm during Apple’s efforts to push consumers more toward online ordering as well as the refitting of its stores away from traditional tills to roaming staff using remote payment devices.
“The last five years have been the most stimulating, challenging and fulfilling of my career. Through the teams’ collective efforts, Retail has never been stronger or better positioned to make an even greater contribution for Apple,” Ahrendts said in a statement.
“I feel there is no better time to pass the baton to Deirdre, one of Apple’s strongest executives. I look forward to watching how this amazing team, under her leadership, will continue to change the world one person and one community at a time.”
Her replacement, O’Brien, is more of an Apple stalwart, having joined the company in 1988 and worked in sales before moving to HR.
The executive reshuffle also follows a grim few months for the company after a first-quarter profit warning in January caused the share price to tumble.
READ: Apple shares plunge after tech giant warns 1Q revenue will be lower than expected
The warnings were confirmed at the end of the month when revenues from iPhone sales fell 15% from a year ago to US$51.98bn, missing consensus market forecasts of US$52.67bn.
Apple’s chief executive Tim Cook admitted at the time that customers were struggling with Apple’s high prices and were holding onto older iPhones for longer than in the past, with the firm suggesting that iPhone prices could be cut in some locations after the disappointing figures.
The company also saw a dip in demand from China, one of its core markets, bolstering the case that the premium pricing model may have finally pushed customers too far.
Timing of departure odd but China demand will be focus going forward, says analyst
In a note, analysts at Wedbush said while the timing of Ahrendts' departure was “a head scratcher”, given the challenges the company was facing, change could be a good thing at the firm.
They added that with O’Brien now in charge, the main focus was likely to be “catalysing demand in China with the store experience a major factor in this region as well as other regions with consumers getting the "Apple experience" when they look to test drive new technology in the store”.
“Apple is entering a critical period with iPhone demand sluggish on this latest XS/XR cycle and driving demand on the retail front will be critical to a rebound in success for Apple as it heads into its next product cycle in September 2019.”
In pre-market trading on Wednesday morning, Apple shares were up 0.25% at US$174.6.