Does Apple's new retail SVP, John Browett, make sense? [Stock talk]
"Is it also possible that Browett's experience at Dixons, and before that Tesco (the world's third largest retailer) might just be right what Apple needs as it continues on its path towards world domination?"
We, and pretty much the rest of the blogosphere were, shall we say, slightly bewildered when Apple announced its new SVP of Retail, John Browett.
Browett is, at first glance, an unusual hire because the retail organization he is leaving seems to be the exact opposite of what Apple stands for. He was the CEO of Dixons, the well known British technology retailer.
Big box retailers couldn't be further from Apple's model of clean, spacious, bright and minimalistic. Apple employees always want to help, knowing that when you are in their store you have already chosen their brand. They are highly service-oriented. Big box sales staff are all about making the sale. They couldn't care less what brand of TV you jam into your SUV after you slip the cashier your credit card.
Apple also has a tradition for promoting from within. So it begs the question, "Why did Tim Cook make this decision?"
It's easy to criticize, but let's remember that if we are outsiders to this decision. We haven't seen Tim Cook as the face behind too many senior hires at Apple, but it's safe to say that he's very experienced hiring and firing. You don't hold the COO position in any company without lots of people management experience.
So while it might seem like his old home of Dixons is the polar opposite of what Apple stands for, could we be guilty of looking only at the cover of the book (or the inside of the store)?
The aspect of this hire that intrigues me the most is that Apple is getting a guy with big company CEO experience. The Apple retail business can easily be thought of as a separate company. It requires inventory, sales staff, and a service organization. It requires growth plans.
And what makes running a big box retailer so difficult? Margins, pricing strategy and competition. Well guess what? Browett doesn't need to worry about those problems. Those are Cook's problems. Browett just needs to use his CEO skills to keep the ship moving in the right direction.
I don't think Cook is looking to Browett for sales innovation.
Apple is already in excellent shape after 11 years of retail leadership under Ron Johnson. Apple has top-shelf problems to deal with such as how to open more stores faster (and in new markets) without screwing up the shopping experience.
There's no question Apple has room to grow in its retail store lineup. As of the most recent financial results, Apple generated $3.5 billion in store sales, which is only 12.7% of total company sales. To me this suggests Browett's job is more about growing the existing business and generating upside for Apple. The downside of him performing poorly is probably not something I'm interested in seeing happen, but as a shareholder this is far from my biggest worry.
Is it weird that Tim Cook is bringing in a Dixons guy? Yeah. But is it also possible that Browett's experience at Dixons, and before that Tesco (the world's third largest retailer) might just be right what Apple needs as it continues on its path towards world domination? Yeah. It might.