As Angela Ahrendts moves on to take a senior post at Apple, Burberry’s incoming chief executive could be facing a shift in the geography of the luxury retail landscape.

As Angela Ahrendts moves on to take a senior post at Apple, Burberry’s incoming chief executive could be facing a shift in the geography of the luxury retail landscape.

After seven years at the helm Angela Ahrendts, chief executive of Burberry, is moving on to take up a role as senior vice-president of retail at Apple.

Her spell at Burberry has certainly been a defining one. As chief executive she oversaw significant expansion, implementing strategies to tap into emerging markets, especially China where a £70m franchise buyout in 2010 enabled Burberry reap huge rewards.

In the process Ahrendts has more-than tripled the value of the company to a market capitalisation of over £7bn. Ahrendts leaves Burberry on a high, first half sales are up 14% and Ahrendts has delivered successive years of profit and revenue growth.

From an investment perspective the transition to a new management may be troubling. Christopher Bailey will take over the role of chief executive with no experience of running a business. He will also be combining the role with his current position as creative director which could stretch him. However, just as worrying is the changing luxury market facing Burberry.

Fears of a Chinese slowdown have repeatedly hit investor confidence in luxury. But more recently weakening consumer sentiment coupled with a government crackdown on corruption, gift-giving and displays of wealth have weighed heavily on luxury firms.

Burberry has weathered things better than some peers, but only last week Ahrendts warned that a slowdown in China may be more than a blip. Even the latest figures reflect “high single digit” Chinese growth rather than the strong double digit growth luxury has become accustomed to.

Bailey faces the challenging task of diversifying Burberry’s emerging market strategy to seek out the “next” China – a luxury goods market that will deliver growth even as Chinese demand eases. The difficulty, however, is where this opportunity might lie. Other BRIC countries have yet to fully deliver in the same way that China has.

Brazil and Russia support strong demand for luxury, but among a wealthy elite rather than an emerging middle class. Meanwhile India’s income levels are some way off generating the demand for luxury that China has, a trait shared with other key future markets such as Indonesia and Sub-Saharan Africa. The last six months have seen store openings in India, Brazil and Mexico as well as China, indicating that Burberry is well aware of the need to hedge bets in the search for new markets.

Of course, Ahrendts navigated difficulties too, not least the global economic crisis and plummeting luxury demand in Europe. But for her, as for other luxury firms, China emerged as a white knight; Bailey may have some searching to do yet.

Jon Copestake, retail analyst, The Economist Intelligence Unit