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Questions Over ‘Large’ iPhone Stock at Telstra & JB Hi Fi As Apple Shop Boss Quits

Apple Australia are not saying whether they will continue with the opening of controversial Federation Square store after its retail chief, Angela Ahrendts, announced that she is quitting Apple, she was tipped as a potential successor to run Apple replacing current CEO Tim Cook.

The sudden resignation of Ahrendts who joined the Company in 2014 comes as Apple struggles with a 15% slump in sales of their latest iPhones.

ChannelNews understands that both Telstra and JB Hi Fi have asked Apple to take a large stock of iPhones back which the two retailers have been unable to sell.

Questions are now being asked about the viability of some Apple stores that are located in prime retail positions in some of Australia’s most expensive shopping locations.

Citizens for Melbourne spokesman Brett de Hoedt told The Australian Ms Ahrendts departure showed how fragile Apple’s plans for the Melbourne store really are.

“Tech companies come and go, and they change their plans to suit themselves,” he said. “All it takes is someone to quit and it all comes apart.”

The Victorian government in late 2017 announced it had signed an agreement with Apple to demolish the Yarra building in Federation Square to make way for a flagship Apple store, one of five globally.

Artists Impression Of Apple Federation Square Store Melbourne

Mr de Hoedt said Apple’s got a number of problems to grapple with, including diminishing iPhone sales and a potential heritage listing of Federation Square in April.

Ms. Ahrendts, one of Apple’s most highly paid executives and most prominent female leaders, joined the company in 2014 from fashion house Burberry Group and was charged with revamping Apple’s stores and improving employee morale.

The Wall Street Journal said that during Apple’s most profitable run, Ms. Ahrendts presided over a sizable retail expansion that punctuated the company’s luxury-brand appeal and, more recently, close observers say she was a capable caretaker of Apple’s successful retail strategy but that little changed radically under her tenure.

“She doesn’t seem to have given the retail experience any forward-leaning point of view,” said Mark Cohen, director of retail studies at Columbia Business School. “Though they made some noise about creating a community centre out of the store, I don’t think that had any traction.”

Ms. Ahrendts had enjoyed the support of Apple’s board over the years and had been viewed as a potential successor to Chief Executive Tim Cook, people close to the board said.

Apple doesn’t disclose its store sales, but the company’s wider business has faced pressure from investors to reignite iPhone sales, which have been disappointing. The company’s iPhones sales declined 15% to $51.98 billion during the three months ended in December, the company’s biggest sales period.

In January, Mr. Cook expressed disappointment about a decline in customers visiting Apple Stores in China as the economy has slowed there.

During her tenure at Apple, Ms. Ahrendts’s compensation totalled US$172.8 million, including stock awards, according to company proxy statements. After joining the firm, she was granted a signing bonus of more than 113,000 units of restricted stock, then valued at about $68 million.

Because of their high-profile locations and role as product-demonstration spaces, Apple’s stores have an outsize effect on the company’s bottom line, said Toni Sacconaghi, an analyst with Sanford C. Bernstein & Co. “It’s more important than the revenue would indicate.”

Ms. Ahrendts leaves as a time when Apple users can no longer simply make an impromptu visit to the Genius Bar, the company’s in-house tech support. Long waits for appointments at Apple Stores have become a fact of life for many urban customers, an apparently worsening issue for Apple’s retail strategy, said Neil Cybart, founder of Above Avalon.