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TheStreet Open House

Visioning a New and Better Apple Retail Strategy

Stocks in this article: AAPL MSFT TSLA LULU WMT TGT BBY

NEW YORK (TheStreet) -- If Tim Cook hired former Burberry CEO Angela Ahrendts to do nothing more than mind the current iteration of Apple's (AAPL - Get Report) retail ship, I question Cook's motives as well as Ahrendts' decision to take the gig.

You don't bring a heavy hitter like Ahrendts in without big plans and an appetite for change.

ICYMI: Antoine Gara of TheStreet wrote Time to Think of Apple as a Global Luxury Brand late last week. His article goes a long way to explaining why Ahrendts now assumes a position Apple, for all intents and purposes, left open since Ron Johnson left:

I wonder whether it's time to evaluate Apple as one of the premier global luxury brands and find a set of comparable companies with similar margin and growth characteristics.
Maybe Apple's better comparables would be Burberry apparel, LVMH Moet Hennessey Luis Vuitton goods, Diageo (DEO) alcohols, Tesla Motors (TSLA - Get Report) electric cars, Lululemon (LULU - Get Report) yoga pants and Estee Lauder (EL) perfumes ...
Buyers of the products from (these) luxury brands are also more than likely to be Apple iPhone and iPad users, relative to Samsung or Microsoft.

Gara goes on to ask a solid question:

Why do we relentlessly seek ways to compare Apple with a narrow universe of tech sector giants?

Because that's what "we" know.

For better or worse (and I think worse), the financial media, including my employer, TheStreet, tends to rely on people -- like Wall Street analysts -- who speak a language that pretty much only allows for obvious comparisons. Guys like Antoine Gara are few and far between. Anybody can call Apple a "luxury brand," but to take it a step or three past the obvious and say, maybe we ought to stop comparing Apple to Microsoft (MSFT - Get Report) and use companies such as Hermes requires a whole 'nother cognitive leap.

I trust Ahrendts -- and by virtue of hiring her, Cook -- realizes that if she's going to position Apple like the global luxury brand Gara describes, she needs to treat it like a luxury brand domestically.

This speaks to the drum I've been beating for roughly a year now: Apple needs to blow up its third-party retail relationships. That means get the heck out of every popsicle stand from Target (TGT - Get Report) to Best Buy (BBY). And there's no time like the present to cut ties with the biggest dump of them all -- Wal-Mart (WMT - Get Report).

If you're going to put Apple in the same league with the brands Gara mentions internationally and include them in the TSLA/LULU, not MSFT/Google (GOOG) category, it's past time to make what's happening on the ground reflect this now only half-realized reality.

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