What's the future of Apple retail with Ron Johnson's departure?

Summary:Apple's vice president of retail, Ron Johnson, is leaving for J.C. Penney. How are Apple Stores likely to fare without him?

On Tuesday it was revealed that Ron Johnson, Apple's senior vice president of retail, is taking the reins of department store chain J.C. Penney as CEO. It's a major change for Apple, which has seen Johnson lead the company's retail efforts since the first Apple stores opened a decade ago.

Apple has indicated that it's actively recruiting for a replacement for Johnson.

Johnson's legacy to Apple is impressive - taking the company from 0 to more than 300 retail locations worldwide, with an annual operating profit in the last six months of $1.84 billion - double what Apple retail did a year ago. All told, Apple's retail efforts account for 13 percent of its total revenue.

Under Johnson's stewardship, Apple has reinvented how Apple's products have been marketed to the general public. The typical Apple store is simply a backdrop to showcase the products. Its decoration is elegant but almost austere - hardwood floors and lots of open space, with very little adornment. Even in the highest-profile locations, like Apple's Fifth Avenue store in New York City - the entrance of which is a giant, gleaming glass cube that rises above street level - once you're inside, it's the same simple furniture, brightly lit ceilings and walls, and friendly staff that mark the typical Apple retail experience.

Prior to Apple stores, Macs could be found on the store shelves of some computer and big box electronic retailers - Comp USA, Best Buy and others - and a haphazard network of independently owned and operated Apple-authorized retail stores. It was the sloppy presentation of Apple products in those stores that led Steve Jobs and Apple to the creation of the stores in the first place. The Wall Street Journal offers a peek behind the curtain of how Apple manages its stores and employees in a new article entitled "Secrets From Apple's Genius Bar: Full Loyalty, No Negativity."

So what's likely to happen to Apple retail store efforts in the wake of Johnson's departure?

For the short term, very little is likely to change. Apple retail stores are making money - more money, in fact, than they ever have.

The future of Apple's retail stores will require a decidedly different skill set than the strengths Ron Johnson brought to the table. Prior to his tenure at Apple, Johnson helped reinvent Target from a budget department store struggling to compete with Wal-Mart and K-Mart to a chic alternative to other retailers. Certainly, J.C. Penney is hoping to draw some of that magic with Johnson's arrival, when he joins their board this summer and takes over as President this winter.

During his tenure at Apple, Johnson was an empire-builder, working with Steve Jobs and other key Apple executives and board members to create a retail arm for the company out of whole cloth. Johnson had a unique opportunity. Whoever replaces Johnson needs to take a different tack altogether, and instead of building the empire, growing it and maintaining it.

Much of that will be dependent on the future of Apple's product line. Jobs successfully reinvented Apple itself from a niche personal computer manufacturer to a major player in the consumer electronics business, first with the iPod and then the iPhone, and now Jobs says Apple is at the forefront of what he calls the "Post-PC era" with the iPad.

And as with all high-profile efforts at Apple, whoever replaces Johnson will, of course, need to remember that the buck stops at Jobs' door more than his own.

Topics: Apple

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