Apple Retail Stores Continue to Buck Economic Sluggishness

[Rot'nApple]

Bloomberg reports on Apple's retail store performance amidst the current economic situation, noting that Apple's retail sales have held up remarkably well as other merchants have seen sales slip.The report focuses on Apple's flagship Fifth Avenue store in New York City, noting that the store may be the highest-grossing retail outlet in the famed shopping district on a per-square-foot basis.

I wonder if MS will mirror Apple's Fifth Avenue store location in hopes of duplication of their success... plus it would be interesting to see them go head to head and although the MS store may not actually sell much of anything, it would be interesting to see what sales generation leads it does commence (provided there is a way to calculate).

 

[talkingfuture]

Wow they are making a heck of a lot of money from those stores then. I was always unsure as to their worth considering Apple has such a good online store. Guess this shows that they are worth it.

 

[ericinboston]

If it's true that their Fifth Avenue store generates sales of $350 million, and taking into account that Apple Inc's total revenues are $35 billion (see http://www.wolframalpha.com/input/?i=APPL), then we can conclude that 1% of the sales one of the largest consumer electronics companies in the world come from just one store.

Wow.

How is this a "wow"? 1%. Big deal. Apple has about 250 physical locations...some that do great, some probably poorly (in Apple's eyes of comparing against all 250 Apple stores). The only other "store" that Apple has is online...maybe it generates 10% of all Apple sales. I have no idea.

This particular Apple store is right in the middle of the US' biggest city with folks who shop for a living....of course Apple (and any store) is going to do well in NYC.

All I'm saying is 1% of "all sales" is nothing. Because if the best is 1%, then all the other Apple stores are at like .2% so everyone (including online sales) tallies up to 100%. We'll probably never see the breakdown publicly. I've heard this store in NYC is gigantic...huge...much different (and also holds more people and has a much bigger possible walk-in base compared to their other stores) than the 4-5 Apple Stores I've been in in CT and MA over the years...those stores are like 40feetx40feet single floor...no comparison.

 

[ddarko]

A previous report had pegged Apple's annual sales for its Fifth Avenue store at as much as $440 million, although that number may have been slightly inflated, as it came from the building's owner as it was being marketed for sale.

Ah, no. The $440 million figure was included in the building's sales prospectus, which securities law requires must contain accurate and truthful information. The $440 million figure is the real deal; it's the $350 million figure quoted in Bloomberg that's the guesstimate.

 

[Digitalclips]

So there is an obvious new tag line for Apple ... "Apple stuff ... more valuable than diamonds" or words to that effect

 

[newyorksole]

Yeah whenever I go to the 5th Ave Apple Store it is usually very crowded.

One time I went to a local Apple store and the family was buying 2 MacBook Pros, 1 iMac and like 2 iPod touches.

 

[xlii]

Doesn't surprise me they are doing well. Whenever I get to the Natick Mall store in Massachusetts the Apple Store is packed to the gills.

 

[DMann]

This particular Apple store is right in the middle of the US' biggest city with folks who shop for a living....of course Apple (and any store) is going to do well in NYC.

Try telling that to FAO Schwarz, located behind the Apple Store - FAO filed bankruptcy twice since 2000. How about the Gateway store, which opened a store in NYC in 1999? I'm sure Balducci's would also have liked to have known about guaranteed success in NYC before closing both stores, both of which had highly coveted locations, not to mention Lord & Taylor, Tower Records (Lincoln Center, which is being replaced by a new Apple Store) Gimbel's Department Store, and a plethora of Starbuck's located throughout 'prime time' Manhattan. The fact that the Apple Store 5th Ave. earns more $ per square foot than does Tiffany and Co. is nothing to sneeze at, either.

 

[flottenheimer]

Loving this piece of news. I really want Apples retail concept to succeed. It's simply revolutionary on so many levels.
And if it performs well during a global financial crisis, it should be able to survive almost anything.

 

[i.mac]

Those "Laptop Hunters" commercials seem to be doing wonders - consumers seem to feel that they're "cool enough" to purchase computer solutions which work really well, after all.

agree...

I always thought that those adds favored apple more than any body else...

 

[seedster2]

Kudos to Apple but....

What does comparing a computer purveyor with a luxury goods provider in a down economy actually tell you? Youre more likely to buy an $150 iPod or a $300 money clip - so what?

I think tourists are much more likely to get diamonds and jewelry from the diamond district if youre looking for a deal. Luxury retailers also dont offer sales/pricedrops to lure customers in. I wonder how LV down the street performs...

I stick to the SoHo store when I have to get something in person.

 

[alent1234]

If it's true that their Fifth Avenue store generates sales of $350 million, and taking into account that Apple Inc's total revenues are $35 billion (see http://www.wolframalpha.com/input/?i=APPL), then we can conclude that 1% of the sales one of the largest consumer electronics companies in the world come from just one store.

Wow.

Once in a while i go to the Best Buy at 6th ave and 23st in NYC and it's busier in the summertime than the Loveland, CO Best Buy is in December. a lot of the NYC stores have more people living within one mile than the same store in another state has people in the town

 

[alent1234]

Try telling that to FAO Schwarz, located behind the Apple Store - FAO filed bankruptcy twice since 2000. How about the Gateway store, which opened a store in NYC in 1999? I'm sure Balducci's would also have liked to have known about guaranteed success in NYC before closing both stores, both of which had highly coveted locations, not to mention Lord & Taylor, Tower Records (Lincoln Center, which is being replaced by a new Apple Store) Gimbel's Department Store, and a plethora of Starbuck's located throughout 'prime time' Manhattan. The fact that the Apple Store 5th Ave. earns more $ per square foot than does Tiffany and Co. is nothing to sneeze at, either.

the old FAO store sold mostly the exact same stuff as Toys R' Us at higher prices. Apple products are the same price everywhere.

Toys are mostly a December business while computers are year round.

 

[rwilliams]

I can't believe that people are arguing about "dollars per square foot". If the article hadn't mentioned that rather odd statistic, none of you would care about it whatsoever.

 

[eastercat]

Perhaps I'm wrong. However, I dare say that Tiffany's can survive without your concern. They've gone through economic downturns before and will survive this one.

By the way, I also looked in the Tiffany store in Century City and there were a good number of shoppers there too. But they were browsing the displays and I didn't see anybody actually buying anything. I hope they cover their rent too.

 

[Lesser Evets]

Practical items don't falter during recessions and depressions.

Serious.

 

[scroto]

What's with this forums members obsession with MS? What does MS have to do with this story? Can't you people have one thread without bringing up MS? I can tell you for a fact that in the PC hardware forums Apple is rarely mentioned.

 

[deconstruct60]

Bloomberg reports on Apple's retail store performance amidst the current economic situation, noting that Apple's retail sales have held up remarkably well as other merchants have seen sales slip.

Two things.
1. No where do they mention year-over-year sales in the Apple stores. Apple is also adding stores in other markets faster than many of the retailers they compared to here in this story.

2. From the Bloomberg article

Respondents said they’d sooner skimp on housing, clothing, groceries and tobacco products. The only items they’re more reluctant to cut spending on than mobile service are prescription and over-the- counter medicines.

Save for the reduction on tobacco, sounds like crack-head mentality to me. Basic food , housing, and clothing... screw that stuff ... give me my drugs and my mobile phone. Those are my #1 priorities. Got to wonder if any of the folks surveyed have families? [ realize folks easily overspend on food and clothes. How many women have the imelda marcos shoe closet ... I've lost count. But housing? ]

ooops sorry 3 things.

When did real estate selling folks become the final word on actual store sales? ( conflict of interest...... I have properties Apple may or has already leased ... give me more money. )

 

[DMann]

the old FAO store sold mostly the exact same stuff as Toys R' Us at higher prices. Apple products are the same price everywhere.

Not quite true, FAO sold much higher quality and superior grade stuffed animals as well as other higher end mechanical toys, specialty items, etc. You can try to say the same for Apple, yet they have been more successful at that. Now that ToysRus has acquired FAO Schwartz, the quality difference factor has been all but leveled out.

Toys are mostly a December business while computers are year round.

It seems that birthdays occur all year round, in addition to other 'gift bearing' holidays, anniversaries, and occasions. The Christmas Store seems to turn a profit year round despite Christmas being a December holiday - go figure.

 

[Bjohnson33]

Apple really does seem unstoppable lately. Their stock has been flourishing while everyone else's has taken a real pounding over the last six months.

 

[ericinboston]

Try telling that to FAO Schwarz, located behind the Apple Store - FAO filed bankruptcy twice since 2000. How about the Gateway store, which opened a store in NYC in 1999? I'm sure Balducci's would also have liked to have known about guaranteed success in NYC before closing both stores, both of which had highly coveted locations, not to mention Lord & Taylor, Tower Records (Lincoln Center, which is being replaced by a new Apple Store) Gimbel's Department Store, and a plethora of Starbuck's located throughout 'prime time' Manhattan. The fact that the Apple Store 5th Ave. earns more $ per square foot than does Tiffany and Co. is nothing to sneeze at, either.

I'm not sure what you were looking for as a reply...but at least I will address the examples you gave.

Out of the thousands of stores (I'm not talking about just mega-conglomerates) in NYC, you found 5 that went out of biz...which we've all heard before...but I will recount them for ya

1)FAO Schwarz had been hurting for years...ever since their failure in the early 2000s to adopt online customers while Amazon and Toys.com killed them in sales...not to mention it was literally an hour+ wait just to get in the store every single day...FAOS was, for a long time, more of a "let's go in, pay the $10 to ride the store train, and tell mom and dad we went there!"...it was a place to tell someone "you went there" like going to the Statue of Liberty or Niagara Falls.

2)Tower Records...come one, that ENTIRE CHAIN fell apart in 2001 due to Amazon, iTunes, CD Universe, eBay, CDNow, and the billion other online stores...not to mention the ability to see and buy 100 times the selection of "imports" on the net...I've been buying cds online since 1997 or earlier...routinely...I'm an ex-dj.

3)Lord & Taylor...no specific comment since I never go there...but they've been doing bad all over, too, as my wife tells me.

4)Starbucks...sheeez...that chain fell apart about 4 years ago...when the bubble burst in early 2002, nobody had money to go buy their $5 coffees anymore. They've been closing places all over the country for years...didn't you see the headlines a few years ago that they were closing like 40% of their locations?

5)Gateyway...come on...are you serious? There are like 4 GW stores in the country...the last time I even SAW one was 10 years ago in Natick, MA. You might as well have told me Fred's Air Conditiong Shop closed down.

 

[DMann]

I'm not sure what you were looking for as a reply...but at least I will address the examples you gave.

Out of the thousands of stores (I'm not talking about just mega-conglomerates) in NYC, you found 5 that went out of biz...which we've all heard before...but I will recount them for ya

1)FAO Schwarz had been hurting for years...ever since their failure in the early 2000s to adopt online customers while Amazon and Toys.com killed them in sales...not to mention it was literally an hour+ wait just to get in the store every single day...FAOS was, for a long time, more of a "let's go in, pay the $10 to ride the store train, and tell mom and dad we went there!"...it was a place to tell someone "you went there" like going to the Statue of Liberty or Niagara Falls.

2)Tower Records...come one, that ENTIRE CHAIN fell apart in 2001 due to Amazon, iTunes, CD Universe, eBay, CDNow, and the billion other online stores...not to mention the ability to see and buy 100 times the selection of "imports" on the net...I've been buying cds online since 1997 or earlier...routinely...I'm an ex-dj.

3)Lord & Taylor...no specific comment since I never go there...but they've been doing bad all over, too, as my wife tells me.

4)Starbucks...sheeez...that chain fell apart about 4 years ago...when the bubble burst in early 2002, nobody had money to go buy their $5 coffees anymore. They've been closing places all over the country for years...didn't you see the headlines a few years ago that they were closing like 40% of their locations?

5)Gateyway...come on...are you serious? There are like 4 GW stores in the country...the last time I even SAW one was 10 years ago in Natick, MA. You might as well have told me Fred's Air Conditiong Shop closed down.

This particular Apple store is right in the middle of the US' biggest city with folks who shop for a living....of course Apple (and any store) is going to do well in NYC.

Your post clearly stated that "any store is is going to do well in NYC." Now, you are backpedalling by making exceptions?

 

[ericinboston]

Your post clearly stated that "any store is is going to do well in NYC." Now, you are backpedalling by making exceptions?

I'm not backpeddling...I am/was explaining.

Those 5 that you listed (maybe not Starbucks because I don't drink coffee and have no idea how long they have been around) all did well for years if not decades...stores, especially in a bad economy like the past few years, will see ups and downs...and combine that with foolish ignorance (ignoring the internet in Tower and FAO's cases) and they go bye-bye. And who's bought a Gateway in the past 10+ years?...seriously. I'm not kidding. Who? I didn't even know their stores still existed...thought they were selling via mail order again and via outlets like BestBuy and Staples.

All I'm saying is that NYC is a shopping city...that's what people do there when they are not working...shop. It is the shopping center of America. If you have the ability to open a store there, you will do well so long as you are not an idiot and/or ignore your customers. Rent is high but the volume of people is ridiculously high.

Apple is going to do well there for a long time...unless of course Apple as a company pulls another Apple Crash like they do every 8-10 years and hang on by a thread. Apple is clearly a more entertainment-focused company and moving away from computers...sure, Apple will likely sell computers forever but it seems Apple is concentrating much more on ipods, iphones, tvs, and other non-Mac things. I don't want to go off topic but I just think that any company who can open a store in NYC will do well unless they are ignorant.

-Eric

 

[poematik14]

I get my apple stuff online so I dont have to worry about the headaches of being crammed in a store with hundreds of people who arent buying anything and wasting the employees time asking stupid questions.

 

[Bubba Satori]

Most of the products inside are overpriced and often outdated. I can't understand why anyone would shop there.