* Christopher Bailey to combine creative, CEO roles
* Angela Ahrendts to step down in mid-2014, to join Apple
* CFO says appointment will not mean strategy change
* H1 revenue up 14 percent to 1.03 bln stg
* Shares fall 7.6 percent
(Updates pay details, shares)
By James Davey and Kate Holton
LONDON, Oct 15 Burberry boss Angela
Ahrendts, who has overseen a doubling in sales and a 250-percent
jump in the shares of the British fashion brand, will leave to
take up a job at Apple next year and hand over to
creative director Christopher Bailey.
Shares in the 157-year-old group, which is best known for
its camel, red and black check pattern, fell 7.6 percent on
Tuesday after Burberry said the 42-year-old Bailey would act as
both chief creative officer and chief executive.
"I would say that the creative and CEO roles do not
necessarily sit easily together. Angela was always seen as a
business person who had a sense for the fashion. A fashion
person with a sense for business might be a harder sell as CEO,"
one top 20 Burberry shareholder said on condition of anonymity.
Ahrendts and Bailey are credited with helping to restore
Burberry's cachet after it became a victim of its own success in
the 1990s when its trademark pattern was embraced by the mass
market, losing its appeal to its core wealthy clientele.
As well as steering the brand back upmarket, they shifted to
a more profitable strategy of selling clothes and accessories
through Burberry shops rather than department stores and led a
big expansion into fast-growing emerging markets like China.
Ahrendts, a former executive of U.S. fashion house Liz
Claiborne who has headed Burberry since 2006, will take up a
newly created position at Apple as a senior vice president with
oversight of retail and online stores.
The 53-year-old American, who also introduced webcast
catwalks and a website dedicated to Burberry's traditional
trenchcoats, will report directly to Apple CEO Tim Cook.
Ahrendts, who took home 6.8 million pounds ($10.9 million)
in Burberry's 2012-13 financial year, will be looking to do
better than the last CEO of a UK retailer who left London to
join Apple - John Browett, who quit Dixons to head the
iPad and iPhone maker's global retail expansion in 2012. He left
six months later.
Ahrendts was the highest paid FTSE 100 boss in Burberry's
2011-12 financial year.
Her exit will leave just two female CEOs of blue-chip UK
companies - Alison Cooper of Imperial Tobacco and
Carolyn McCall of easyJet, despite a government-backed
campaign to increase the number of women in top executive jobs.
Moya Greene, the boss of Britain's newly privatised Royal
Mail postal service, is likely to join them later this
year when it enters the benchmark FTSE-100 index.
NO STRATEGY CHANGE
Burberry, which boasts models Cara Delevingne and Jourdan
Dunn as faces of the brand, said its strategy would be unchanged
under Bailey and that the Yorkshireman was well able to cope
with dual roles.
"He's also got an incredibly sharp commercial mind," said
finance chief Carol Fairweather, adding he would be supported by
strong creative and operational teams beneath and alongside him.
History has shown that brands directly managed by their
artistic director can be successful, for example Giorgio Armani
and in the early days of the brand Ralph Lauren.
Burberry, which trades globally from around 470 stores,
concessions and outlets and employs a staff of nearly 10,000,
reported retail revenue up 17 percent to 694 million pounds in
the six months to Sept. 30 - bang in line with analysts'
forecasts. Total revenue was 1.03 billion pounds, up 14 percent.
Growth was driven by a 13 percent rise in sales at stores
open over a year, with double-digit growth in the Asia Pacific
and Europe, Middle East, India and Africa (EMEIA) divisions and
high-single digit growth in the Americas. Outerwear and large
leather goods categories performed particularly well.
The firm said mainland China - the engine of luxury industry
growth in recent years but which has been faltering of late -
delivered a high single-digit percentage growth in comparative
store sales in the second quarter and that it was pleased with
its performance there.
LVMH, the world's biggest luxury group, is due to
report third-quarter sales data after the market close.
Burberry said it expected underlying first-half pretax
profit to be around last year's 173 million pounds, better than
previous guidance for a decline, but added the recent
appreciation of sterling, if it persists, could impact the
translation of second-half revenue and profit.
Burberry shares, up 41 percent over the last year, closed
down 121 pence, or 7.6 percent, at 1,462.5 pence, valuing the
business at about 6.5 billion pounds.
($1 = 0.6244 British pounds)
(Additional reporting by Chris Vellacott, Sinead Cruise and
Astrid Wendlandt; Editing by Mark Potter)