Sources Claim Tim Cook Was True Mastermind of Apple Retail Cuts

| Rumor

Tim Cook Apple Retail CutbacksBase image via Jim Urquhart, Reuters

Following the news earlier this month that Apple Retail Chief John Browett was linked to an aborted attempt to drastically diminish the quality of the company’s retail stores by cutting employee pay and working hours in an effort to improve profit margins, a new report from ifoAppleStore suggests that Mr. Browett’s controversial moves were orchestrated by Apple CEO Tim Cook.

Apple Retail Stores, conceived and developed by current J.C. Penney CEO Ron Johnson, traditionally placed a heavy emphasis on customer service at the expense of immediate profits. By providing the absolute best customer experience as a first priority, Mr. Johnson believed, financial success would likely follow.

Mr. Johnson’s nontraditional retail approach paid off, and Apple Retail Stores have become an iconic symbol of Apple’s resurgence over the last decade as well as the most successful retail operation in the history of the world.

When then-CEO Steve Jobs took a medical leave of absence in 2009, however, Mr. Cook, who excelled at logistical operations for the company, assumed leadership of Apple and its retail operations.

According to ifoAppleStore’s sources, Mr. Johnson encountered strong resistance to his “service first” approach from Mr. Cook and Apple CFO Peter Oppenheimer. When Mr. Cook became permanent CEO in 2011, Mr. Johnson left the company to run struggling retailer J.C. Penney and Mr. Cook was free to choose a replacement of like mind. From ifoAppleStore’s report:

Last year when Cook became the permanent CEO, he hired Browett from UK-based Dixons to head the retail chain. Cook was apparently attracted by Browett’s like-minded focus on the more traditional concepts of retailing—logic and process leading to revenues and profits. With his new position as CEO and staffed with a revenue-focused Sr. VP, Cook naturally moved the retail operation in different directions, the sources say, resulting in last month’s staffing changes.

Apple has been unsurprisingly quiet on the issue, except for a statement earlier this month from Apple spokesperson Kristin Huguet, who told Dow Jones Newswires: “Making these changes was a mistake and the changes are being reversed. Our employees are our most important asset and the ones who provide the world-class service our customers deserve.”

While the information provided by ifoAppleStore cannot be officially confirmed at this point, Daring Fireball’s John Gruber and The Loop’s Jim Dalrymple, who are both close to Apple, have expressed their concerns over the report’s accuracy.

The fact that Mr. Browett remains in his current role at Apple, however, suggests that his ideas are not completely antithetical to those held by at least some key members of Apple’s management team.

Has the whole Apple Retail situation been, as the company claims, an honest “mistake?” Or, as ifoAppleStore’s source claims, is this simply the beginning of an era for Apple in which “those that have come from other failed or failing retailers will be allowed to peddle their poor ideas…and tarnish what has been one of the single greatest retailers on the planet.”

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Comments

skipaq

If it is true that Cook was behind or even supported this move, then hopefully he has changed his thinking. Try thinking of ways to improve retail rather than squeeze it for more profits. Strangling the golden goose for one extra egg is short sighted.

mrmwebmax

+

Strangling the golden goose for one extra egg is short sighted.

Well-put. To which I’ll add, If it ain’t broke, don’t fix it.

Greg

DIxons is a miserable failed electronics retailer from here in the UK.  It’s inconceivable how this companies ideals converge anywhere with Apples’.

vpndev

Pamper the goose, get more golden eggs.

Simple, really.

ibuck

As a longtime Apple customer and shareholder, I’m feeling a bit woozy thinking about how another MBA (Tim Cook) is trying to improve ratios and percentages by squeezing people who are earning (what?) $10-12 per hour?

Keep Insanely Great SERVICE foremost in your mind, Mr. Cook.

Aaron

Greg… What exactly makes you an expert on retail? And why is it you feel Dixons are a ‘failed’ ? The last time I looked their shares have almost doubled in this past year and they seem to be doing very well considering the current economic climate.
I’m not comparing them to the apple experience but let’s not forget they are a retailer only… Not a manufacturer/retailer with billions of dollars in the bank!

iJack

I just knew when this story first arose, that it would lead to the top.  I’m still a little uncomfortable with Cook at the helm.  It seems he learned nothing from Steve.

Greg

Hi Aaron.
IMO, the difference between Apple and Dixons are a world apart.  Im refering to customer experience.  I appreciate Apple manufacture aswell, but it’s no excuse for under-trained staff, who are more interested in selling an extended warranty.  Dixons profits are of no interest to me.  I just want good buying advice from knowledgeable staff.

Aaron Fothergill

Greg? What exactly makes you an expert on retail? And why is it you feel Dixons are a ?failed? ? The last time I looked their shares have almost doubled in this past year and they seem to be doing very well considering the current economic climate.
I?m not comparing them to the apple experience but let?s not forget they are a retailer only? Not a manufacturer/retailer with billions of dollars in the bank!

If you go into a Dixons you’ll see why they’re failed. The shops are usually empty of customers (and if you are a customer, they seem to apparently be empty of staff as you can’t find anyone to help you).

anovelli

In many ways, the customer experience both at the retail stores and online/over the phone is one of the 3-4 aspects of Apple that I talk about with people considering switching. While the bar is set so low at virtually every other retailer in comparison (even Amazon), that’s no reason, as is said above, to mess with success. The retail experience has Jobs’ name written all over it. Nowhere else in retail is there the ability to meet both complete neophytes and seasoned geeks on the same play field without alienating. Genius by design.

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