British business lost two of its biggest hitters yesterday when Angela Ahrendts said "adieu" to Burberry and Hector Sants bid Barclays "au revoir".
Ahrendts, a globe-trotting whirlwind of energy from Indiana, returns to the US as Apple's worldwide head of retail and it seems unlikely she will ever come back.
Sants’s goodbye is hopefully more temporary. Barclays’ head of compliance and regulatory relations has succumbed to the modern banker’s nemesis: stress and exhaustion. Like Lloyds Banking Group’s chief executive Antonio Horta-Osorio two years ago Sants will, on his doctor’s advice, take a three-month leave of absence.
Neither departure was trailed, and both are blows. But while Barclay’s share price was unaffected, the resignation of Ahrendts, who transformed Burberry from its “chav” links into a social media fashion forward, blew a hole in investor confidence leaving its shares 6.2 per cent down.
Ahrendts will be replaced by her wingman Christopher Bailey, Burberry's creative director, with whom she has worked since 2006. The duo became fashion's stand-out double act, famously revising the company's strategy on a napkin over lunch after Ahrendts joined. Bailey then reworked Burberry's standout product, the trenchcoat, and oversaw a canny social media strategy.
Workaholic
But it was Ahrendts, a workaholic who rises at 5am, who bought back the franchises that were lowering the tone of Burberry's brands, axed the checked baseball caps and shirts beloved of Eastenders stars and football hooligans and drove expansion into the lucrative emerging markets. Without her Burberry is in for a rocky ride until Bailey proves he can handle the maths as well as the drawing.
For Ahrendts, who was Britain's best-paid chief executive with £16.9 million (€20 million) a year at Burberry, her future and her fortune are still before her. While Burberry is high profile, it is a minnow compared with Apple, turning over £2 billion last year compared with £11.8 billion at Apple Stores. While Ahrendts's new remuneration is not disclosed, her predecessor Jim Browett banked £36 million just for signing up.
Tantalising hints
Her recruitment also offers tantalising hints into the technology giant's future strategy. Given that she is joining former Yves Saint Laurent chief executive Paul Deneve at Apple, the odds on the launch of an iWatch and other technology wearables should have been slashed.
Sants's predicament is much less happy. Five years running the now defunct Financial Services Authority and a year trying to clean up Barclays' endless legal and regulatory problems have clearly taken their toll on his health.
This is disappointing for Barclays boss Anthony Jenkins whose vision of a group-wide compliance and regulatory affairs function was a key plank in the rebuilding of Barclays' credibility. The recruitment of a former regulator who was, on occasion, pretty tough on Barclays, was a clear statement of intent by Jenkins. That said, the Barclays chief may not be entirely surprised; Libor lawsuits, insurance and swaps mis-selling cases, and an inquiry into a murky Qatar-backed rescue rights issue in 2008 would challenge the best bankers.
Jenkins will at least be pleased the announcement did not dismay Barclays’ investors, most of whom participated in a heavily discounted rights issue earlier this month. Perhaps they are taking heart from the example of Horta-Osorio, who returned to Lloyds Banking Group after time off with stress two years ago and has suffered no repeat problems since.
Neither Sants nor Ahrendts are the sort of executives British business can afford to lose. Ahrendts's departure means there are now just two women chief executives in the FTSE 100: Alison Cooper at Imperial Tobacco and Carolyn McCall at easyJet. That number had already depleted by the losses of Marjorie Scardino at Pearson and Cynthia Carroll at Anglo American, so the addition of Royal Mail chief executive Moya Green will be a welcome one should the company join the FTSE's top flight in its December reshuffle.
As for Sants, nobody has ever claimed London had a surfeit of honest bankers.
