“The latest threat to the shopping-mall hierarchy is an unlikely one. But Apple is challenging the dominance of department stores,” John Jannarone reports for The Wall Street Journal. “The technology giant isn’t branching into clothing or furniture. It is, however, expanding its presence in malls. That is a territory where department stores have long been treated better than other tenants because they attract shoppers. Often, such so-called anchor tenants pay little or no rent.”
“But Apple has arguably become an equally important attraction, thanks to a consistent string of blockbuster products. Indeed, Apple stores have overtaken many traditional anchors by revenue [$34.1 million per retail store vs. Macy’s $29 million via much larger stores and J.C. Penney’s $16.1 million, estimates Michael Exstein of Credit Suisse.]”
Jannarone reports, “And yet, Apple isn’t getting anchor privileges. Steve Sakwa of ISI Group estimates Apple pays $50 to $80 a square foot in annual retail rent… As Apple’s benefits become clearer, landlords likely will need to make a sacrifice to enjoy the fruit.”
Read more in the full article here.
MacDailyNews Take: There’s only one store that regularly generates lines out into the parking lot, wrapped around the mall, and it isn’t Macy’s or J.C. Penny or any other store in the place not named Apple.