The Apple Retail Store turns seven-years-old today!
The first two Apple Stores opened in Tysons Corner, Virginia and Glendale, California on May 19, 2001. Last Thursday, May 15th, Apple opened their largest Apple Retail Store in the US: Apple Store, Boylston Street in Boston.
Currently, Apple has deployed 210 stores, including 182 in 37 US states, 15 in the UK, seven in Japan, and four in Canada with plans for 40 or so more stores by the end of 2008.
Reuters reports, “In its financial quarter to March 29, Apple’s store sales jumped 74 percent, to nearly $1.5 billion. Average revenue per store in the quarter reached $7.1 million, up 48 percent from a year earlier. Meanwhile, quarterly operating profit at the stores more than doubled, to $334 million.”
MacDailyNews Note: Apple’s retail stores generate sales at the U.S.-leading rate of $4,032 per square foot a year (for comparison, Saks generates sales of $362 per square foot per year; Neiman Marcus, $611; Best Buy, $930; Tiffany & Co, $2,666), according to a report last year by Sanford C. Bernstein analysts (based on an average of Apple’s then 174-store retail network). In 2004, Apple reached $1 billion in annual sales faster than any retailer in history; last year, sales reached $1 billion a quarter.
“Ron Johnson, Apple’s head of retailing, said Wednesday that an international retail presence would be an important driver of future sales,” Reuters reports. “‘Today, Apple is about 50 percent international revenue and about 50 percent in the U.S.,’ he said. ‘We increasingly want to get our retail presence out in the other countries.'”
Full article here.
More information about Apple’s rapidly-growing fleet of retail stores, including links to maps, calendars of events, and much more, here.
I give [Apple] two years before they’re turning out the lights on a very painful and expensive mistake. – David Goldstein, Channel Marketing Corp. President, May 21, 2001
They should have a special edition copper iPod available with a wool cover.
There’s no chance that they’ll be successful in retail. I mean, look at what happened in Gateway Country!
What’s David Goldstein up to these days anyway?
Fascinating reading the article from 2001. I well remember the nay-sayers back in those days, and then see the line-ups for each store opening.
Man I like seeing an under-dog finally succeed. Especially when I switched from PC to Mac back in 1994.
It’s time to turn the lights off on a costly mistake.
Oh wait… you mean they’re actually successful?!?!
NEVER underestimate Apple.
More of Goldstein’s wisdom from the NY Times (By Jennifer Lee, Published: July 12, 2001):
“No computer manufacturer has successfully branched into retail stores, Mr. Goldstein said. ”It’s completely flawed,” he said of Apple’s venture. ”They’ll shut it down and write off the huge losses in two years.'”
And another gem from BW Online (By Cliff Edwards, May 21, 2001):
“Rather than unveil a Velveeta Mac, Jobs thinks he can do a better job than experienced retailers at moving the beluga. Problem is, the numbers don’t add up. Given the decision to set up shop in high-rent districts in Manhattan, Boston, Chicago, and Jobs’s hometown of Palo Alto, Calif., the leases for Apple’s stores could cost $1.2 million a year each, says David A. Goldstein, president of researcher Channel Marketing Corp. Since PC retailing gross margins are normally 10% or less, Apple would have to sell $12 million a year per store to pay for the space. Gateway does about $8 million annually at each of its Country Stores. Then there’s the cost of construction, hiring experienced staff. ‘I give them two years before they’re turning out the lights on a very painful and expensive mistake,’ says Goldstein.”
Quick trivia…
What was the third store to open?
“3. Willow Bend – Plano, TX – (Aug. 3) – indoor mall. In mid-2006 the theater was removed, and the Genius Bar was moved to take its place and upgraded to five positions.”
(ifoapplestore.com)
<< What’s David Goldstein up to these days anyway? >>
Would you like fries with that?
*snicker*
If I were an asshat, I’d email him and ask how his prognostication about Apple Retail worked out.
*points in David Goldstein’s direction and laughs!*
“I give [Apple] two years before they’re turning out the lights on a very painful and expensive mistake.”
Yes, very painful and expensive to Apple’s competitors!
It’s not just the retail store that is successful, but the fact that customers and potential customers can actually go some place to actually see, touch, and experience the products, and speak with real people face to face for advice, questions, and problems. Too many other companies are trying to outsource everything overseas. This drives folks nuts. Imagine if your car needed work and you couldn’t actually speak to someone face to face about it. It would drive you insane. Why did brands like Acura and Lexus succeed? Great customer service and experience. Same goes for the Apple stores.
Thanks for the quotes MDN and Ampar! Excellent!
I remember when Apple announced the stores and the naysayers jumped on it right away. It turns out the stores were one of the last pieces in the puzzle that gets Apple’s name out there and allows people to have a hands-on experience with their products.
Note to David Goldstein….
Apple doesn’t sell P.O.S. Gateway PCs. That’s why their stores have been wildly successful whereas the Gateway Country stores were an absolute flop.
Sadly the stores are starting to become fancy Best Buys.
I remember when you’d go into an Apple Store that had a theater and watch the MacWorld keynote… or the WWDC keynote — live.
Now it’s just filled with kids who should be working at the Gap.
they are building a new shopping center at alexanderplatz (one of the central places) here in berlin. would have been a perfect match for the first berlin apple store. ah wait … i must be dreaming.
RE: MacDailyNews Take
MDN should give a “where are they now?” with all the iCal’d quotes.
I had the impression that the Apple Stores were now selling $4800 per sq ft, not $4000.
Also, while it’s easy to laugh about it now, the fact is, the leases on that retail space are incredibly expensive. Apple has huge future obligations, in the billions.
Apple had no choice but to open it’s own retail stores. None of the pundits figured that out. Apple HAD to open its own stores or die.
1. That was the only way most PC users would ever see a Mac in the wild.
2. No one else cared about marketing the Mac—not Sears, Best Buy, Circuit City, etc. etc. etc.
3. Mac establishments in existence were too few and far between and they were NEVER in high-traffic areas of well-heeled malls.
The very thing most pundits thought was bad—expensive mall space—was the very thing Macs needed most. Exposure to a well-educated, upscale, non-Mac audience that was actually shopping for their home, not buying for their IT department.
Performas abused and suffering in Sears stores. Those were dark times.
Too much glass – remind me to be elsewhere when the earthquakes hit.