Apple's retail chief, Angela Ahrendts, is leaving (AAPL)

Angela Ahrendts

Apple's head of retail, Angela Ahrendts, is leaving the company.
She'll be replaced by Deirdre O'Brien, who also heads up human resources.
Over the five years she worked at Apple, Ahrendts spearheaded a major redesign of the company stores.

Apple's head of retail, Angela Ahrendts, is leaving the company after a five-year run, a surprise change that raised questions about the company's plans for the network of roughly 500 retail stores considered vital to its sales and brand.

Ahrendts will leave Apple in April to embark on unspecified "new personal and professional pursuits," the company announced on Tuesday. She will be replaced by Deirdre O'Brien, whose new title will be senior vice president of retail and people. She was previously Apple's head of human resources.

The change marks one of the most high-level executive moves at Apple in recent years and comes as the company is struggling with slowing iPhone sales and weakening demand in China.

The timing of Ahrendts' departure is "a head scratcher," wrote Wedbush analyst Dan Ives in a note to investors on Tuesday. But he noted that the change could be good for Apple, given the company's problems over the past year.

"A major focus of Apple with O'Brien now running the show will be catalyzing 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," Ives wrote.

Apple stock was flat in after-hours trading.

O'Brien is an Apple veteran, but will she have too much on her plate?

Apple's sleek, airy retail stores are central to the company's identity, providing consumers with a familiar place to play with the company's latest iPhones, Mac laptops and other products, as well as to seek technical support and advice from shop's on site "genius" technicians.

During her five years overseeing Apple's retail stores, Ahrendts was in many ways the face of Apple's retail experience. She joined Apple after running the fashion company Burberry, and was a notable presence at Apple's product launches, as well as being the company's highest-paid executive.

Ahrendts spearheaded a major retail redesign during her time at Apple, including the replacement of the "Genius Bar" service center with the "Genius Grove," which featured indoor trees and allowed Apple technicians to roam around the store. But many older stores haven't been refurbished, and Apple at times has seemed to press pause on its retail expansion.

While O'Brien has worked at Apple for more than three decades, she has a much lower profile among Apple investors and company followers. There was no bio posted about her on Apple's website at the time the announcement was made, and she did not appear to have a publicly viewable profile on LinkedIn.

The expanded scope of her duties, along with her non-retail background, left some observers wondering if she risked being stretched too thin for such an important part of Apple's business.

With more than 70,000 retail staffers, the retail business represents the largest segment of the more than 100,000 employees on Apple's payroll — a good fit with O'Brien's background overseeing human resources.

Still, Michael Gartenberg, a tech industry analyst who previously worked at Apple, described merging the HR and the retail segments as "a little bit odd."

Combining HR and retail into one position is more than a little bit odd. Apple clearly didn't want the retail position to be left blank. It will be interesting to see how this plays out longer term.
— Michael Gartenberg (@Gartenberg) February 5, 2019

The way I see it is that Angela improved the infrastructure of Apple Retail and now Deirdre can work on the day to day power to improve the experience. The one concern is of course the breadth of her role and how much she can dedicate to each part.
— Carolina Milanesi (@caro_milanesi) February 5, 2019

Some speculated that Ahrendts' exit was a reflection of an evolving strategy at Apple that has already been underway for some time. When Ahrends was hired in 2013, Apple was just preparing to launch the Apple Watch, a brand new product category in tech. Ahrendts' backround at Burberry aligned well with Apple's plans to market the Watch as a luxury item, with expensive wristbands and gold-plated versions.

Since then, Apple has largely abandoned the luxury aspect, focusing on the broader consumer market and positioning the Watch as a utilitarian gadget brimming with health and fitness features.

Without knowing details, of course, this seems like a smart take. She was brought on leading up to the Watch launch when it sure seem to be angled around fashion — remember the Edition?! — that approach failed, but Apple Watch did not, just found its home in health/fitness... https://t.co/YPwMcod8rA
— M.G. Siegler (@mgsiegler) February 5, 2019

Apple CEO Tim Cook tweeted a farewell on Tuesday, with a picture of himself alongside Ahrendts and O'Brien:

A bittersweet set of announcements today. Angela, we thank you for all you’ve done to inspire and energize our teams. Deirdre, we can think of no one better to lead our stores and all of Apple’s people in their mission to change lives for the better. pic.twitter.com/PekF8rU9Qe
— Tim Cook (@tim_cook) February 6, 2019

Read Apple's entire press release below:

CUPERTINO — Apple today announced that Deirdre O’Brien is taking on new responsibilities for Apple’s retail and online stores in an expanded role as senior vice president of Retail + People, reporting to CEO Tim Cook. After five transformative years leading the company’s retail and online stores, Angela Ahrendts plans to depart Apple in April for new personal and professional pursuits.

In her expanded role, Deirdre will bring her three decades of Apple experience to lead the company’s global retail reach, focused on the connection between the customer and the people and processes that serve them. She will continue to lead the People team, overseeing all People-related functions, including talent development and Apple University, recruiting, employee relations and experience, business partnership, benefits, compensation, and inclusion and diversity.

“At Apple, we believe our soul is our people, and Deirdre understands the qualities and strengths of our team better than anyone,” said Tim Cook, Apple’s CEO. “For more than three decades, she has helped keep Apple focused on serving customers and enriching lives. She’s an exceptional leader and she’s been a vital partner to our retail teams around the world since the very beginning. I am thrilled to work alongside Deirdre in her new role, and I know our 70,000 retail employees will be, too.”

“People come to Apple to do the best work of their lives, and our retail teams show their passion every day, in every interaction, all around the world,” said Deirdre O’Brien, senior vice president of Retail + People. “It is the opportunity of a lifetime to work with, and learn from, such a talented, diverse and imaginative team. I am looking forward to this journey, and to continuing the important work of the People team in supporting all of Apple’s amazing employees.”

Apple today operates 35 online stores and 506 retail stores on five continents, staffed by teams who are dedicated to enriching lives and serving their communities. Every Apple retail store location offers innovative programs for customers, including Today at Apple, designed to unlock creativity, inspire learning and encourage connection.

“I want to thank Angela for inspiring and energizing our teams over the past five years,” said Tim Cook. “She has been a positive, transformative force, both for Apple’s stores and the communities they serve. We all wish her the very best as she begins a new chapter.”

“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,” said Angela Ahrendts, senior vice president of Retail. “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.”

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