LONDON BRIEFING:WHEN JOHN Browett, chief executive of Dixons Retail, took a call from a headhunter wanting to talk about a job in the US, he made it clear he wasn't interested – until, that is, the headhunter revealed the company was Apple.
That was enough to get Browett on a flight to California to meet Apple chief executive Tim Cook, the man who took over the top job at the technology giant last year after Steve Jobs stood down from the role shortly before his death.
At first, Browett viewed it as an opportunity to meet the Apple team – “I didn’t actually think I’d get it,” he told reporters yesterday. But the meetings clearly went well and now Browett is to head up Apple’s global stores chain, swapping life in Hemel Hempstead, where Dixons is based, for Cupertino in California.
The move took stores-sector watchers by surprise, both in Britain and the US. Dixons, which owns Currys and PC World, may be the largest electrical goods retailer in the UK but the company, whose shares have crashed by 90 per cent over the past five years, is a shadow of its former self.
One veteran Apple follower in the US described the company as “a depression-era photography studio that took its name randomly from a telephone book”. Many others, on both sides of the Atlantic, wondered whether Browett’s new boss (this is his first major external appointment since taking over from Jobs) had ever visited a Dixons store.
Given Dixons’s troubled past, and its reputation for poor customer service, it is astonishing that Browett found himself in contention at all for what is undoubtedly one of the most coveted jobs in global retailing.
Apple certainly cast its net wide, using a firm of international headhunters in a search that took more than seven months.
For an executive who earned his retail spurs at Tesco before joining Dixons in 2007, jumping ship to Apple is a no-brainer. Per square foot of selling space, Apple stores are the most profitable in the world, generating sales of some $20 billion (€15.3 billion) last year. The US giant is keen to step up expansion of its 360-store chain overseas, particularly in countries such as China.
So where does the 48-year-old Browett’s departure leave Dixons? Its shares initially fell sharply on the news, although they made a partial recovery to close at about 8 per cent lower.
The UK retailer has moved swiftly to fill the gap, appointing group operations director Sebastian James as the new chief executive, as well as creating a new role of UK and Ireland chief executive for e-commerce director Katie Bickerstaffe.
The appointments were well received by analysts, which helped limit the fall in the share price. The new team is judged more than capable of continuing the turnaround job that Browett was brought in to do when he joined from Tesco in 2007.
Although Dixons is still saddled with a reputation for poor customer service, it has improved hugely in recent years and its new-look stores are much brighter, more pleasant places to shop.
Dixons sells Apple products in its stores and last year was awarded exclusive rights to sell the iPhone in the UK after its launch. The US company is said to have sent mystery shoppers into Dixons’s revamped stores to give them the once-over. They obviously liked what they saw.
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THERE'S NOword on whether Browett will be making an appearance later this month at Hangar 89, the utilitarian Luton headquarters of EasyJet. He has been an independent non-executive director at the budget airline since 2007 and, along with the rest of the board, has become accustomed to the company's long-running spat with founder Sir Stelios Haji-Ioannou.
Haji-Ioannou has stepped up his war of words with the board, accusing them of treating the company like a “personal piggy bank”. At issue is a pay deal that could award 10 executives shares worth £8 million (€9.65 million) over the next three years, along with £180 million he claims has been issued in free shares over the past decade.
The scene is set for a showdown at EasyJet’s annual meeting later this month. The directors have made it clear they will resign if the company’s founder uses his 37 per cent shareholding to vote against them. Haji-Ioannou has urged them to go ahead, saying he could replace them at half the price.
The EasyJet board has rejected Haji-Ioannou’s claims, maintaining that pay targets at the group are among the toughest in the sector. But accusations of fat-cattery are becoming harder to defend these days, as Stephen Hester of Royal Bank of Scotland has discovered. The sparks are set to fly at Hangar 89.
Fiona Walsh writes for the Guardiannewspaper in London