John Browett's short tenure at Apple was marked by strife

Posted:
in AAPL Investors edited January 2014
Less than ten months after hiring John Browett to lead its retail stores, Apple has already decided to let the former chief executive of Dixons go.

Apple hired Browett at the end of January to fill the shoes of Ron Johnson, who had left Apple the previous November for an opportunity to remake US retailer JC Penny as its chief executive.

Johnson had built Apple's retail presence over the past decade, creating a string of the most profitable retail stores around the world. In its quarterly earnings call last week, the company noted that it now has 390 stores worldwide, generating an average revenue per store of $11.2 million. Apple's retail stores sold 1.1 million of the quarter's 4.9 million Macs.

Despite being mocked on arrival, Apple's retail stores are so critical to its business that they are now being closely mimicked by competitors ranging from Microsoft to Dell to Samsung, and even closely counterfeited by retailers selling Apple products in China.


John Browett


John Browett, Apple's new SVP of Retail. | Credit: Dixons

From Dixons?

When Browett was hired, Apple's chief executive Tim Cook announced, "Our retail stores are all about customer service, and John shares that commitment like no one else we?ve met. We are thrilled to have him join our team and bring his incredible retail experience to Apple.?

Browett had been at Dixons since 2007, and before that he had been the chief executive of Tesco.com. His previous experience caused many to immediately wonder how well he would fit in at Apple.

"Strange choice," commented AppleInsider reader RichL at the time. "Shopping at Dixons (and sister store PC World) is a terrible retailing experience."

In fact, the majority of the comments posted on the announcement of Browett's hiring were negative, describing Dixons as having "the worst shopping experience in the UK," and being famous for "terrible service, ugly cluttered shops, pushy staff who don't have a clue about the products and will happily lie to you in order to get a sale."

Reader Penchanted predicted, "I have an ominous feeling that Apple will be looking for a replacement inside a year."

Browett shakes up Apple's retail

Browett began working at Apple on April 20, and was awarded substantial stock grants of 100,000 restricted shares, valued at over $60,000,000. Those shares were scheduled to vest over time, however.

The first 5,000 fully vested October 20 (and are currently worth about $3 million), but the majority of the shares never did. Another 15,000 were scheduled to vest at the end of his first year. That leaves Apple with $57 million in shares to offer Browett's replacement.

Browett's performance began to cause complaints from Apple retail workers within a few months, with sources telling AppleInsider this summer that Browett had frozen all hiring at the beginning of August and initiated a series of efforts to scale back payroll expenses.

Sources also complained that Browett had started deferring facilities repairs as "not business critical" and advising employes to "get creative" and to fix things themselves.

In mid August, a scathing report by IFO Apple Store described "a series of recent administrative moves to reduce the number of Apple retail store employees" and blamed an effort by Browett to increase Apple's retail profit margins.

The report claimed Browett had told Apple's retail outlets to "learn to 'run leaner' in all areas, even if the customer experience is compromised."

During fiscal 2011, Apple's retail stores generated $14.1 billion in revenue and $3.1 billion in profits, operating at around a 22 percent profit margin over the past five years, the report noted. Browett was seeking to improve upon that. Retail operations currently contribute about a tenth of Apple's profits.

Cook to lead retail for now

Apple is now entering its critically important holiday quarter without a dedicated retail executive, but the same situation occured last year when Johnson left in November, after announcing plans to leave in June.

Browett's departure is immediate. Apple said its entire Retail team will report directly to Cook until a suitable replacement is found.

Last year, Apple worked with recruiting agency Egon Zehnder International to find a replacement for Johnson, a decision made by Steve Jobs, who was said to be "extensively involved" in the process and wanted to "consider executives who are based abroad."

At the time, 62 percent of Apple's revenue was being generated overseas, a number that is growing. China is a particularly important market for Apple; the company announced plans to build 25 additional stores there in 2010, when it only had one finished and another in progress. Today it has six.

Apple has also touted its retail strength in the US, noting that each of its 246 domestic stores employs an average of 100 people, "the majority of whom are full-time employees," the company says. "Unlike most retailers, we don?t rely on seasonal hiring. And part-time Apple Store employees are eligible for the same benefits as our full-time staff, including health insurance and the employee stock purchase plan."

Apple has 27,350 US retail employees, 3500 of whom have worked for Apple for over five years. Apple employs a total of 47,000 employees in the US, "two-thirds of its worldwide headcount," and it has added 19,500 jobs since 2008.
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Comments

  • Reply 1 of 48
    John Browett had absolutely no understanding of what makes the Apple Store and Apple itself unique. Tim Cook hiring this guy was a huge mistake, so it's great to see that this moron has been fired as of today.
  • Reply 2 of 48


    John Browett had absolutely no understanding of what makes the Apple Store and Apple itself unique.  Tim Cook made a huge mistake hiring this guy, so it's great to see that this moron has been fired.

  • Reply 3 of 48
    juandljuandl Posts: 228member
    Surely Ron Johnson will be available in a little while. Cook can have someone oversee the actual construction for now till that happens.
    But may as well offer Fadell a job also. They are gonna need all the good help they can get.
    Maybe even Scott Forstall will feel a little different once he gets a few months off. Especially if they were to offer him the same deal as Mansfield got for overseeing work.
  • Reply 4 of 48
    felix01felix01 Posts: 221member
    Well, the Brit readers warned us about John Browett and why he'd never mesh with the Apple culture.

    Didn't take Tim Cook very long to see they were right...and take corrective action.

    You've got to admire a leader who realizes/admits he was wrong and takes quick remedial action before said employee could do any real lasting damage to the organization and its brand identity.
  • Reply 5 of 48
    cash907cash907 Posts: 893member


    Did Dell ever have a retail operation? I don't recall any. Gateway 2000, soon after simply Gateway Inc, pioneered the concept of a corporate run, single brand computer retail store called Gateway Country in the late 90's. I worked at one for about a year, and from the welcoming cafe-like setup where customers were invited to sit down and explore the systems, to the in-house full featured tech support, Apple Stores seemed like a carbon copy of those Gateway Country stores, but with aluminum and glass instead of wood and granite. I was sad when GC was closed down, and happy to see it's spiritual successor in Apple Retail do so well and be accepted the way it was by the consumer. This is largely why I never cared for Browett, as he just didn't seem to get the concept of happy customer = repeat customer.


    Good bye, and good riddance.

  • Reply 6 of 48
    analogjackanalogjack Posts: 1,061member
    His head was too pointy.
  • Reply 7 of 48
    lerxtlerxt Posts: 182member
    Blame for this appalling hire rests on Cook. I really do wonder why he thought " hey the guy who built Dixon's retail presence is GOOD!" A bit like "hey this map app is great! Release it!" I really question his judgement sometimes.
  • Reply 8 of 48
    And they had the Browett attend the opening of that new store in China. Smiling through clenched teeth, he probably couldn't wait to fire half of the staff there.
  • Reply 9 of 48
    drblankdrblank Posts: 3,383member
    Maybe they need someone with a background from Nordstrom or some other high end retail store that is customer centrix that is also a Machead.
  • Reply 10 of 48
    cash907 wrote: »
    Did Dell ever have a retail operation? I don't recall any. Gateway 2000, soon after simply Gateway Inc, pioneered the concept of a corporate run, single brand computer retail store called Gateway Country in the late 90's. I worked at one for about a year, and from the welcoming cafe-like setup where customers were invited to sit down and explore the systems, to the in-house full featured tech support, Apple Stores seemed like a carbon copy of those Gateway Country stores, but with aluminum and glass instead of wood and granite. I was sad when GC was closed down, and happy to see it's spiritual successor in Apple Retail do so well and be accepted the way it was by the consumer. This is largely why I never cared for Browett, as he just didn't seem to get the concept of happy customer = repeat customer.
    Good bye, and good riddance.

    I bought a Gateway there back in the late 90's. I enjoyed the experience and liked how they gave you a mug, a mousepad and a little squeezy cow thing. Silly little trinkets but it made you and the product feel special. They just never figured out their place in the market or created enough differentiation in their products. Plus Dell was popular at the time.
  • Reply 11 of 48
    This is a mistake that Tim Cook will remember. These changes will make Apple stronger -- what a company! DogCowabunga, dudes! Sorry I won't be having little grass skirted boundaries to replace the leather stitching on the calendar programs, though. Oh, well!
  • Reply 12 of 48
    drblankdrblank Posts: 3,383member

    Quote:

    Originally Posted by oneaburns View Post





    I bought a Gateway there back in the late 90's. I enjoyed the experience and liked how they gave you a mug, a mousepad and a little squeezy cow thing. Silly little trinkets but it made you and the product feel special. They just never figured out their place in the market or created enough differentiation in their products. Plus Dell was popular at the time.


    You bought a Moo Box?  I wouldn't be going around publicly stating that.  Moooooo..


     


    It's kind of like admitting you bought Windows Vista......

  • Reply 13 of 48
    shadashshadash Posts: 470member

    Quote:

    Originally Posted by Cash907 View Post


    Did Dell ever have a retail operation? I don't recall any. Gateway 2000, soon after simply Gateway Inc, pioneered the concept of a corporate run, single brand computer retail store called Gateway Country in the late 90's. I worked at one for about a year, and from the welcoming cafe-like setup where customers were invited to sit down and explore the systems, to the in-house full featured tech support, Apple Stores seemed like a carbon copy of those Gateway Country stores, but with aluminum and glass instead of wood and granite. I was sad when GC was closed down, and happy to see it's spiritual successor in Apple Retail do so well and be accepted the way it was by the consumer. This is largely why I never cared for Browett, as he just didn't seem to get the concept of happy customer = repeat customer.


    Good bye, and good riddance.



     


    I went in a Gateway store once, probably over 10 years ago.  The store was empty but I sat there for 10 minutes without anyone welcoming me or even acknowledging me.  Apple Store customer experience is way different.  Even if its packed, they always have someone at the front welcoming people and moving them to where they need to go.  And correct me if I'm wrong, but I remember Gateway not actually having product in stock - you just ordered it and they shipped it to you.  

  • Reply 14 of 48
    drblank wrote: »
    You bought a Moo Box?  I wouldn't be going around publicly stating that.  Moooooo..

    It's kind of like admitting you bought Windows Vista......

    Yes and it worked well...well as far as PC's go. Not embarrassed by it all. Now, my hair style in the early 90's, that was embarrassing. 8-)
  • Reply 15 of 48
    freerangefreerange Posts: 1,584member
    This is actually really great news! Browett was a recent bad hire to head up retail, and management has moved quickly to dump him. As to Forstall, this is long overdue. He was not that highly regarded by his own team or by industry observers. He lacks vision and has actually been holding back innovation on the software side. And now with Jony Ive taking over UI / "human interface" we should see much improvement in a relatively short time. Especially with iOS.
  • Reply 16 of 48
    rfhjrrfhjr Posts: 44member
    The is the best news I've heard since the day the iPhone5 was released! Shopping at the Apple stores in my area (Rockingham, NH; Natick, MA and Chestnut Hill, MA) is a delight. The sales and Genius Bar staffers rank at the very top of the scale. While it may be said that the "products sell themselves," Apple Associates add tremendous value. I am proud that Apple treats its employees with respect and affection ... once again.

    Browett's selection was an inexcusable error and it was allowed to go on far too long. This being said, I am grateful that Tim Cook took decisive action and sent him packing. I hope that the next hire comes from within the ranks, steeped in the true Apple culture.
  • Reply 17 of 48
    evilutionevilution Posts: 1,342member
    Not surprised judging by his previous work.
    BTW, we don't want him back.
  • Reply 18 of 48
    shadash wrote: »
    I went in a Gateway store once, probably over 10 years ago.  The store was empty but I sat there for 10 minutes without anyone welcoming me or even acknowledging me.  Apple Store customer experience is way different.  Even if its packed, they always have someone at the front welcoming people and moving them to where they need to go.  And correct me if I'm wrong, but I remember Gateway not actually having product in stock - you just ordered it and they shipped it to you.  

    It was such a long time ago that I went there but I think you're right. That's why you got te little trinkets when you left...you didn't actually have your computer LOL.
  • Reply 19 of 48


    Life has not been easy for Ron Johnson over at JCPenney (an impossible task many have said)....Apple (Mr. Cook) should run over there and pay him whatever is necessary and get him back.  Let him finish at JCP for a year or whatever, but he was part of the team that made things the way they are and Mr. Cook should bring him back on the team if possible.

  • Reply 20 of 48
    cash907cash907 Posts: 893member

    Quote:

    Originally Posted by oneaburns View Post





    I bought a Gateway there back in the late 90's. I enjoyed the experience and liked how they gave you a mug, a mousepad and a little squeezy cow thing. Silly little trinkets but it made you and the product feel special. They just never figured out their place in the market or created enough differentiation in their products. Plus Dell was popular at the time.


     


    Which was ironic, since Gateway also pioneered the concept of "built to order" PC's back in the 80's, which Dell would later run with and make their name off of.


    My first real computer was a Gateway 2000 486-66DX2 with two full megs of RAM, which was a requirement because Wing Commander III ran like garbage under anything less. When it arrived, it came with a nice shiny folder which included a thank you note signed by the cell of four employees who put it together for me personally, along with a mousepad and custom Merry Cowsmas background and screen saver. I was 14 that Christmas, and it was probably the greatest gift I'd ever gotten.


     


    When I was hired by GC at 19, I was already the best salesman they could ask for since I was a huge fan of the product. I wore that button up white shirt with Cow logo on the chest with pride, and my sales kiosk (we each had our own display computer, mine was configured for gaming) was always immaculate and crowded with curious onlookers. I hadn't thought of that job or that store in years, until I stepped into the Apple Store in the Edmonton Mall for the first time while driving from Alaska through Canada, and I was 19 all over again. The same warm interior, the same smiling 20-something excited sales staff, the same immaculate displays with gorgeous hardware just begging to be oogled. This station was for itunes and iPods, that station was running final cut, etc etc, a kids area in the middle (GC had one of those too) and there in the back, the Genius Bar where you could actually talk face to face with the tech that was responsible for fixing your stuff when it "just didn't work." It was soon after this that I bought my first MacBook, a 2009 13", which I'm currently typing this up on.


     


    All of the above, from the mentality to the impact retail presence has on customer, both current and potential, is clearly something Browett never learned in his years in the industry, and why he was ever hired for the position to begin with, considering the flood of negative testimony from those who knew him and his style, was appalling to me. I don't think Cook made this decision as much as he was forced to by the board after iPad sales failed to reach expectations in the last report. I'm curious now as to who they will replace him with.

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