Fortune: Apple Inc. is America’s best retailer

“‘Sorry Steve, Here’s Why Apple Stores Won’t Work,’ BusinessWeek wrote with great certainty in 2001. ‘It’s desperation time in Cupertino, Calif.,’ opined TheStreet.com. ‘I give [Apple] two years before they’re turning out the lights on a very painful and expensive mistake,’ predicted retail consultant David Goldstein,” Jerry Useem reports for Fortune Magazine.

MacDailyNews Take: We love that Goldstein quote. It’s one of our all-time favorite moron quotes. Sorry, “retail consultant.” Who the hell was Jerry’s guidance counselor, the Marquis de Sade?

Useem continues, “Yet five years later, at 4:15 A.M., a light flickered on. Onlookers were bathed in the milky-white glow of the Apple logo, suspended in a freestanding cube of glass at the corner of Fifth Avenue and Central Park South in Manhattan. Dazzling in clarity and 32 feet on a side, the structure was likened variously to a temple, the Louvre Pyramid, Apple’s G4 ‘Cube’ computer, a giant button, and even – in the words of NBC’s Brian Williams – Steve Jobs’ Model T. But it was, everyone could agree, manifestly a store.”

“‘People haven’t been willing to invest this much time and money or engineering in a store before,’ says the Apple CEO, his feet propped on Apple’s boardroom table in Cupertino. ‘It’s not important if the customer knows that. They just feel it. They feel something’s a little different,'” Useem reports.

Useem reports, “And not just the architecture. Saks, whose flagship is down the street, generates sales of $362 per square foot a year. Best Buy stores turn $930 – tops for electronics retailers – while Tiffany & Co. takes in $2,666. Audrey Hepburn liked Tiffany’s for breakfast. But at $4,032, Apple is eating everyone’s lunch.”

“That astonishing number, from a Sanford C. Bernstein report, is merely the average of Apple’s 174 stores, which attract 13,800 visitors a week. (The Fifth Avenue store averages 50,000-plus.) In 2004, Apple reached $1 billion in annual sales faster than any retailer in history; last year, sales reached $1 billion a quarter. And now comes the next, if not must-have, then must-see, product,” Useem reports.

“‘Our stores were conceived and built for this moment in time – to roll out iPhone,’ says Jobs, summoning one to the table with a tantalizing I’ve-got-the-future-in-my-pocket twinkle. If sales are anywhere near expectations – Apple hopes to move ten million iPhones in 2008 – the typical Apple Store could be selling, in absolute terms, as much as a Best Buy, and with just a fraction of the selling space,” Useem reports.

Full article here.

MacDailyNews Note: Apple retail Store locations and info here.

51 Comments

  1. Boy you have to laugh when you remember back to when the first stores opened and all the analysts said it was a huge boondoggle and would lose Apple tons of cash….

    Hindsight sure is better, huh guys??

  2. I’ve just recently set up my own online small business and from day 1, I took my business cues from Apple. The bank manager said my presentation and business plans were far above what most people put before her and feedback from potential customers mirrors that view.

    One day, someone will write a book on how to set up and run a business the Apple way. It’ll sell a million.

  3. Small stores plus high priced items = high sales per sq. ft.

    I bet if you look at the average price of items in other stores the price per item is much lower than what is stocked in an Apple store.

    Guess the workers at the Apple stores deserve a raise… (What´s the ave salary of an Apple worker vs. the other stores mentioned in the article?)

  4. Having been watching Apple closely since 1997, stories like this really bring back the memories of all the doomsayers– like MacObserver’s Apple death knell. These are fun times and things continue to get better.

    Can’t till iPhone and new stuff lands.

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