Apple’s Fifth Avenue Mecca could easily do $40 million in annual sales

“It’s a great space that Apple Computer has picked for its latest Manhattan retail store. The underground concourse outside the General Motors building has never been anything special. As far as retail properties go, the building itself is perhaps best known as the home of the big toy store FAO Schwartz, and more recently as the outdoor studio of The Early Show on CBS,” Arik Hesseldahl reports for BusinessWeek. “But now the big glass cube that marks the entryway to the Apple store underground is what steals the show (see BW Online, 5/18/06, “Apple’s New Store Is Pure Glass”). But then again, Apple is used to one-upping the competition, visually and otherwise.”

“Apple is opening what’s likely to be considered its flagship store on May 19, the fifth anniversary of the announcement of plans to build a retail business. The timing hits home the message that Apple’s strategy — much criticized at the outset — has been a success. Retail stores last year accounted for about 17% of sales, and consumers picked up some 609,000 Macs at retail stores around the world, to say nothing of iPods,” Hesseldahl reports. “My hunch is that the proportion of total sales will grow as the result of this store alone. Consider this: Apple retail stores generate about $4,000 per square foot per year, said Ron Johnson, the Apple senior vice-president in charge of the retail operation, in remarks on the morning of the opening. This new store boasts 10,000 square feet, which suggests about $40 million in sales per year is an easily attainable goal.”

Hesseldahl reports, “As it turns out… products like the iPod cost more overseas. If you live in Buenos Aires and plan a trip to New York, why bother paying as much as $592 for an iPod nano you can pick up in the Big Apple for $249? Tourists from overseas can’t help but be an important calculation for the location of this store. And I’m not the only one who thinks so. I ran into Charles Wolf, analyst at Needham & Co., who lives near the store, and has been walking by it every day for months as the construction work progressed. “What’s going to make this store is the international crowd,” he says. Considering the dollar’s weakness against the euro, ‘the Europeans will be coming in here and not just buying one computer, they’ll be buying dozens. That to me is the real secret to this store. Apple can talk about reaching the people who live on Manhattan’s Upper East Side, but it’s the international tourists who are really going to make this store go.'”

Full article here.
[Thanks to MacDailyNews Reader “Peter G.” for the heads up.]

Related articles:
As fans line up for Apple’s flagship Fifth Avenue retail store, a third NYC store is in the works – May 19, 2006
Sneak peak into Apple’s flagship Fifth Avenue Retail Store – May 18, 2006
Extraordinary Apple Store Fifth Avenue to open on Friday, May 19 (with photos) – May 18, 2006
Apple’s Fifth Avenue ‘Glass Cube’ store to test several retail innovations – May 17, 2006
Mac users to converge on NYC; plan overnight sidewalk camp for opening of Apple Store Fifth Avenue – May 13, 2006
Apple starts online countdown to Apple Store Fifth Avenue ‘Glass Cube’ Grand Opening – May 11, 2006
Apple CEO Steve Jobs may visit New York City to cut ribbon on glass cube – May 04, 2006
Apple’s Fifth Avenue ‘Glass Cube’ retail store grand opening on May 6 in New York City – April 27, 2006
32-foot-by-32-foot glass cube-topped Midtown Manhattan Apple ‘Mecca’ to serve the faithful 24/7? – April 18, 2006
Photos of Apple’s $9 million 32-foot-by-32-foot New York City Glass Cube – January 01, 2006
Steve Jobs to eventually take his NYC big glass cube with him – December 02, 2005
Glass cube assembly begins at site of Apple’s 25,000-square-foot 5th Avenue flagship store – October 28, 2005
RUMOR: Apple Store coming to Midtown Manhattan beneath transparent glass cube – March 04, 2005

23 Comments

  1. Oh yeah, Europeans are flying to New York to buy apples…at the expense of Apple operations in Europe. Yeah, Apple wants that….not.
    Then the surprise comes that the OS is in English, not German or French or whatever AND Apple has limited support for “Foreign” apples…or grey-market apples.

    Not to mention any import tax when one brings them into the country. Dozens of boxes of Apple computers going through customs. Ching! Ching! 15-20-30% import tax.

    And tourists don´t forget to buy that adapter power plug to hook on the end of the US plugged power supply.

    Ignoramus.
    ————

    And did the reporter know that before this Apple store opened foreign visitors could buy apple stuff at other stores??!!!!

    Sheesh! What an idiot.

  2. Jesus Queezie calm the f**k down!

    Btw if you actually used OS X you’d know that changing the language to German, French, Japanese etc. is a 2 second job…

    Ignoramus.

  3. <i>Choice of the descriptor “Mecca” may well be ill-advised, given the propensity of some to fly large aeroplanes into the tall buildings of the Big Apple.</i>

    You mean Dick Cheney?

  4. Foreign visitors will be buying Apple stuff at cheap US prices. I just returned from a month assignment which took me to Italy, Germany and Croatia. I was accompanied by a number of folks from the Phillipines.

    Everyone loved my two iPods but complained about the high prices for the gadgets in Europe and elsewhere. A video iPod costs over $800 in Croatia unless you buy one bootleg.

    Customs inspections were lax throughout my entire trip. It would be easy to carry in a suitcase full of iPods and MacMinis. Perhaps I will on my next trip.

  5. I live in NYC, and the article is exactly right. There are tons of foreign tourists who come to the city to shop, and defray the cost of their vacation through the savings on purchases they would have made anyway.

    If you’ve ever been on 5th Avenue in December, you’d know exactly what I’m talking about.

  6. Jamie: “There are tons of foreign tourists who come to the city to shop”

    It´s like “duh!”…Foreign tourists have always come to NY and have always shopped there.

    ——–

    Hey, Tom – yeah, my German keyboard is the same as your English keyboard….
    Try changing that on your USA bought Mac Book.
    öüäß y and z keys are switched and more.

    ignoramus

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