Apple named its John Browett as its new retail chief and the move is going to be interesting to watch from a management perspective. First, Browett comes from U.K.-based Dixons Retail, which has a mixed history of customer service. And then there's Apple's move to hire an outsider.
Browett (right) will report to Apple CEO Tim Cook and the retail unit isn't small potatoes by any stretch. Apple's retail stores in many ways are its show piece for its hardware and software. The last person to run the Apple retail unit was Ron Johnson, another outsider hired from Target. Johnson is now CEO of JC Penney.
In other words, Apple usually has to hire an outsider to run its retail stores. It would be far more notable if Apple hired an outsider to run product development, hardware design or software.
In a statement, Cook said "our retail stores are all about customer service, and John shares that commitment like no one else we’ve met."
That quote poses a conundrum. A few consumers in the U.K. are already scratching their heads at the Browett hire. Dixons' customer service was spotty at best.
The reaction via Twitter was also mixed. Turns out Dixons' major brands---Currys and PC World---aren't exactly beloved. GigaOm also raises questions about Browett's history nicely. Browett has been an executive at Tesco too. In other words, Browett seems to know the crossroads between big box and mass consumer-Best Buy retailing. Neither approach exactly touches on the Apple vibe.
At Dixons, Browett came to the retailer in 2007 as a turnaround guy. The U.K. retailer had institutional issues with customer service.
Add it up and it's possible that Browett is the right guy for Apple's retail strategy. However, there are more than a few questions about how Dixons and Tesco translate to Apple. Dixons had positive same store sales in 2010, but saw declines in 2009, 2011 and likely 2012, according to Deutsche Bank estimates. Dixons ability to hit its earnings targets is also questionable.
In any case, the stakes are very high. For the three months ended Dec. 31, Apple's retail unit delivered operating income of $1.85 billion on revenue of $6.12 billion, up from $3.85 billion a year ago. For Apple's fiscal year, the retail unit delivered revenue of $14.13 billion, up 44 percent from a year ago. Apple could spin its retail unit off and have a hot IPO.
Fortunately, Browett doesn't have a lot of fixing up to do with Apple's retail stores. On the flip side, he could be the one that botches a well-oiled machine.