Henry Blodget writes:

Apple has finally filled a key hole in its executive team, hiring Burberry CEO, Angela Ahrendts, to run its retail stores and online site.

This is a critical hire for Apple: The company's retail stores are a major competitive advantage, and since ousting its prior retail chief last October, Apple has been searching for the right person to run the business for almost a year.

Few fashion-challenged tech aficionados (myself included) had heard of Ahrendts before this morning, but she's a big star in the luxury world.

Born and raised in a small town in Indiana, Ahrendts ascended through the ranks of Warnaco, Liz Claiborne, Donna Karan, and other fashion companies before taking the helm at Burberry in 2006. In her 7 years at the British fashion firm, she has transformed the company's products and business and delivered excellent returns for shareholders. Ahrendts is said to be a workaholic with both an excellent fashion and design sense and analytical business skills, and according to this 2010 Wall Street Journal profile, the people who know her and work with her have great respect for her.

One question that arose after the news broke was why Ahrendts would go from CEO of Burberry to SVP of an Apple division — a seeming step down on the corporate hierarchy. There are likely at least two answers to this.

The first is that Apple's retail business is vastly larger than Burberry, with about $16 billion in annual sales vs. Burberry's ~$2+ billion.

The second is that, if Ahrendts fits into Apple's culture and does an excellent job running its retail business, she probably has a good chance to become the company's next CEO.