Apple hires Dixons chief to drive global retail

LONDON/SAN FRANCISCO Tue Jan 31, 2012 6:21pm EST

Customers visit the Apple Store in New York City's Grand Central Station January 25, 2012.  REUTERS/Brendan McDermid

Customers visit the Apple Store in New York City's Grand Central Station January 25, 2012.

Credit: Reuters/Brendan McDermid

Related Topics

LONDON/SAN FRANCISCO (Reuters) - Apple Inc has hired Dixons Chief Executive John Browett, who revived the British electronics retailer by emphasizing customer service, to lead the iPad maker's global retail expansion.

Apple chief Tim Cook, making his first high-profile hire since taking the helm of the world's largest technology company, lured the well-regarded industry executive to fill a critical post once held by Ron Johnson, another outsider who left Target Corp to join Apple in 2000.

Johnson resigned from Apple last November to join retailer J.C. Penney Co Inc as chief executive.

Browett, Dixons' CEO since 2007, was previously chief executive of Tesco Plc's successful online shopping site. He will oversee Apple's retail strategy and the expansion of its stores around the world, from the current total of around 300.

The executive, credited with freshening Dixons' image with innovative marketing -- including an advertising campaign featuring Darth Vader -- joins Apple as the Silicon Valley giant eyes markets abroad to sustain its growth.

"An outsider with international experience will help guide Apple's global expansion strategy," said RBC Capital Markets analyst Mike Abramsky. "His experience includes localizing stores for multiple countries."

On Johnson's watch, Apple opened its first retail outlet -- in McLean, Virginia -- in May 2001. It now has a chain of more than 300 stores, which generated an average of $34.1 million each in fiscal 2010 and accounted for 15 percent of the company's net sales.

"(Browett)'s got big shoes to fill," said BGC Partners analyst Colin Gillis. "Ron Johnson drove the Apple store as a customer experience with a positive halo effect for the business."

Wall Street views Apple's stores as an important advantage in competing with rivals Google Inc and Amazon.com Inc as well as other traditional PC makers.

"Our retail stores are all about customer service, and John shares that commitment like no one else we've met," said Cook.

INTERNATIONAL EXPANSION

Apple's retail success is likely to keep growing over the next few quarters as huge numbers of consumers continue to snap up the company's popular iPhones and iPads. Apple sold 37 million iPhones and more than 15 million iPads during the last quarter, and its cash balance swelled to nearly $100 billion by the end of 2011.

Last week, Apple posted quarterly results ahead of market expectations.

Browett's appointment has sparked speculation in some quarters that Apple may be planning a push in its retail operations in Europe, where his expertise is greatest.

But Gillis said that while Browett's international experience is helpful, he did not appear to have the relevant expertise in Apple's key growth markets in Asia.

In October, Best Buy abandoned plans for a chain of European megastores, while Kesa Electricals, Europe's No. 3 player, effectively paid a bidder to take the British money-losing Comet chain off its hands.

Both companies, as well as Home Retail's Argos business, have struggled to compete with Dixons in the UK as Browett revamped stores, focused on more popular megastores and improved product ranges with a mantra of improving the shopping trip for customers.

Shares of Dixons Retail, Europe's second-largest electronics retailer and owner of the Currys and PC World chains in Britain, fell on Tuesday following the news that Browett would leave in April to join the world's leading smartphone maker as senior vice president of retail, based in California.

Dixons, which also runs Elkjop in Nordic countries, UniEuro in Italy and Kotsovolos in Greece, said Sebastian James would succeed Browett.

James, who was instrumental in executing much of Dixons' turnaround plan, is the company's operations director and a former strategy director at mother and baby products retailer Mothercare.

"We understand that the (Dixons) board had already carried out external bench-marking as part of its succession plans, and had decided that internal candidates would provide the best solution," said Investec analyst David Jeary.

Dixons shares, which rose more than 50 percent in the last month after the well-received Christmas trading update, were down 8.7 percent at 13.95 pence. Apple was up 0.25 percent at $454.12 in afternoon Nasdaq trading in New York.

(Additional reporting by Yinka Adegoke in New York and Juhi Arora in Bangalore; Editing by Elaine Hardcastle, Chris Wickham and Lisa Von Ahn)

FILED UNDER: