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Apple retail chief Angela Ahrendts is leaving the company in April

The former Burberry CEO, who joined the iPhone maker in 2014, is leaving "for new personal and professional pursuits."

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Ahrendts when she opened the Apple Store in Union Square in 2016.

Josh Miller/CNET

Apple's retail chief, Angela Ahrendts, will be leaving in April after five years at the tech giant.

The move came as a surprise for many Apple watchers. Ahrendts has been the company's highest-ranking and highest-profile female executive since she joined the company in 2014. Some considered her as a potential candidate to eventually succeed Tim Cook as the company's CEO, though she told BuzzFeed News in late 2017 that speculation was "fake news, silly."

Deirdre O'Brien, Apple's HR chief, will take on Ahrendts' responsibilities along with her current role as head of human resources. She will oversee the company's 35 online stores, 506 retail locations around the world and 70,000 retail employees. O'Brien has worked for Apple for the past 30 years, leading recruiting, Apple University and other projects.

"At Apple, we believe our soul is our people, and Deirdre understands the qualities and strengths of our team better than anyone," Cook said in a statement. Apple said Ahrendts was leaving for "new personal and professional pursuits." The company didn't immediately respond to a request for more information. 

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The move marks the end of Ahrendts' tenure, which brought stability to the company's retail arm after a rocky period under her unpopular predecessor John Browett. Cook fired Browett, former chief of British electronics retailer Dixons, after just six months on the job after deciding he wasn't a good cultural and strategic fit. 

It was up to Ahrendts to turn around Apple's retail operations. She joined Apple from Burberry, where she had been CEO since 2006, and was quickly considered a star among Apple's executive ranks. 

Apple largely defined what a modern electronics-buying experience should look and feel like when it opened the first Apple Store in 2001. But over time, the novelty had worn off, with rivals like Samsung and Microsoft successfully mimicking part of Apple's retail feel. At the same people, people started purchasing more online, with many avoiding physical locations altogether. 

The Ahrendts touch

Ahrendts was the first Apple executive to oversee both the company's physical stores and its online retail efforts. The hope at the time was that she could pull off the same trick she achieved at Burberry -- helping the London-based clothing and accessories retailer balance its luxury brand status while appealing to a mass market. After Ahrendts took over as Burberry CEO in 2006, the company's revenue nearly tripled under her tenure.

"How do you deal with keeping that high-end experience, yet making it accessible to people?" Creative Strategies analyst Carolina Milanesi said. 

While at Apple, Ahrendts has overseen big changes in the company's retail operations. She streamlined the company's systems and processes, and set up a "war room" to make iPhone launch days as smooth as possible. And Ahrendts proved to be popular with retail employees, giving regular video updates to make them feel more a part of the broader Apple team. 

She also sought to turn physical Apple stores into community gathering places, not just locations to make a purchase. The new store architecture -- developed along with Apple Chief Designer Jony Ive -- included "Genius Groves" for tech support and "avenues" with long tables and little shops to give the feeling of being in a town square. Along with rolling the design out in new retail locations, Apple has been remodeling older stores with the updated design. 

"This is not just a store," Ahrendts said nearly three years ago at Apple's San Francisco flagship store, the first location to feature the new retail design. "We want people to say, 'Meet me at Apple, did you see what's going on at Apple?'" 

Along with overhauling the store design and process, Ahrendts launched new classes and events at Apple stores, called "Today at Apple." The program includes free sessions on topics like art, design, coding and photography. And Ahrendts pushed Apple into new locations like South Korea.

Ahrendts has had less success in other areas, though. She joined Apple as the company prepared to launch its first Apple Watch, something it wanted to position as a luxury timepiece. Apple took a different approach to selling the device, requiring customers to get appointments to try on a $17,000 model and keeping even the $349 version tightly locked down. The challenge for Ahrendts came in making the often-chaotic Apple Store environment feel like a premium shopping experience. 

Apple no longer offers the ultra-pricey version of the Apple Watch but instead has current versions of the wearable displayed along the company's other products. 

Ahrendts on Tuesday said her years at Apple "have been the most stimulating, challenging and fulfilling" of her career. "Through the teams' collective efforts, retail has never been stronger or better positioned to make an even greater contribution for Apple."

Retail future

O'Brien, meanwhile, takes over retail operations at a tough time for Apple. The company in early January issued a rare warning -- its first in 16 years -- that it would fall short of its financial projections in the December quarter. Last week, it said its sales in the March quarter also would be lower than analysts expected. It pointed to an economic slowdown in China and the country's "rising trade tensions with the United States" as the main culprits.

It's become harder for Apple and other handset vendors to make huge changes in their devices and differentiate them from one another. Prices for the latest and greatest phones have actually increased at the same time US carriers have gotten rid of subsidies. All of that has meant people are waiting longer to upgrade. 

It's now up to O'Brien to get people to spend even more in Apple's physical and online stores -- while also balancing her role, as head of HR, to make Apple a more diverse company. Apple's most recent diversity report from November 2017 showed it barely moved the needle when it came to hiring more women, though it did make some progress in hiring minorities. 

While Ahrendts made big changes to Apple's retail experience, there's still more work to do, Creative Strategies' Milanesi said. Ahrendts "kind of reinvented the store experience" with classes and the redesign, but "she hasn't solved the problem of what's the in-store experience if I go into a store not to go to a classroom or not to hang out," she said. 

First published Feb. 5 at 2:21 p.m. PT.
Update at 2:35 p.m. PT: Adds more details about Ahrendts' tenure.
Update at 4:10 p.m. PT: Adds more details.

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