(2 of 2)
Glenn McMahon, the chief executive of St. John Knits International, worked for Ahrendts at Liz Claiborne and Donna Karan and recalls her composure even when dealing with the daily crises of taking Donna Karan public. "It was an incredibly stressful time, but Angela was cool, calm and collected," he says. "I think she really relished the challenge."
Good thing. With the luxury-goods market expected to contract 10% globally this year, Ahrendts will need to draw on all of her magic — with numbers, with image, with people — to overcome a tough environment. Burberry isn't immune. During the first quarter, sales fell 14% in the U.S. and 15% in Spain. But Ahrendts looks past the doom and gloom. "From a strategic standpoint, from an investment standpoint, we're staying the course," she says. "We're just going to play a little tighter, a little smarter."
The first step has been to tidy up the company's messy closet. A series of efficiency measures — including switching from warehouses to a distribution hub and shipping half of its products by sea rather than air — has saved the company about $80 million this year. At the same time, Ahrendts has rolled out customer-relations programs, making sure that staff members greet every customer to eliminate the sense of snobbery that she encountered as a young consumer.
She has also launched a full-fledged assault on the under-penetrated U.S. market, with five store openings this year alone. The most visible example of the Stateside strategy is 444 Madison Avenue, the brand's new headquarters for the Americas, which Ahrendts inaugurated at a star-studded gala on May 28. Despite New York City's ban on illuminated rooftop signage, a grandfather clause allows Burberry to place three brightly lit logos — they're 5 ft. tall and 50 ft. wide — on top of the building; only five other skyscrapers in the city are permitted such a display. Ahrendts still seems awestruck. "From the airport, from all over Manhattan, people will see Burberry's name in lights," she says.
Playing smart means leveraging the brand to court what she calls the "millennial consumer" — 20-somethings who will inherit the luxury market as baby boomers rein in spending. To that end, she's launched successful sports, shoe and denim lines and recruited young digital talent to manage the firm's online presence by, among other things, uploading a time-lapse video of the New York sign lighting, set to Rimsky-Korsakov's Flight of the Bumblebee. Burberry counts more than 650,000 fans on Facebook — roughly the same number as Gucci and Prada combined. And Ahrendts chose Emma Watson — the British actress who plays Hermione in the Harry Potter films — as the face of Burberry's latest advertising campaign.
The morning the August issue of French Vogue landed in front of Ahrendts, she couldn't stop flipping through the pages. The Watson ads — shot at Big Ben, the Houses of Parliament and Westminster Abbey — were inside. And the cover showcased a model wearing a Burberry suede trench coat with the same megacheck scarf Ahrendts had so elegantly draped around her own neck. "We haven't forgotten that there's a recession going on out there, but we were in here screaming all morning," she said. "We still get excited. We still celebrate."