On May 19 , 2001 , the first twoApple Retail Storesopened their door inMcLean , Virginia , andGlendale , California . Since then , Apple has opened more than 300 stores worldwide . The stores not only provide a showcase for Apple ’s intersection , but also contribute importantly to Apple ’s bottom rail line .
When Apple first announced its retail programme , the company had $ 4 billion in cash on deal . Retail is an expensive investing , however , and some psychoanalyst question Apple ’s conclusion to open stores .
Among the naysayer was David Goldstein , then President of the United States of consult firm Channel Marketing . “ I give them two class before they ’re turning out the lights on a very painful and expensive misunderstanding , ” said Goldstein in a2001 BusinessWeek article . Arne Alsin of Alsin Capital Management said in anarticle for TheStreet.com , “ It ’s desperation time in Cupertino , Calif. , ” and , “ this move is fraught with problems . ”
The Apple Store on Fifth Avenue in New York City generated sales of more than $350 million–about $1 million per day–in 2009, according to Bloomberg. (Photo courtesy of Apple.)
Other analysts were optimistic . Daniel T. Niles , then a Lehman Brothers analyst , said in 2001 , “ Apple has the power to start draw in fresh customers with the launching of their high - end retail store scheme . ” George Rosenbaum of market research firm Leo J. Shapiro & Associates , suppose in 2001 that the Apple Retail Store was a “ brilliant estimate . ”
Apple was optimistic , too . Even after open more than 20 memory board in 2001 , the main fiscal officer at the time , Fred Anderson , said that Apple could break even on its retail investment by the ending of the vacation shopping time of year — less than a year after the first memory board opening in May .
2001 to 2003: Growing pains
During the proclamation of the 2001 fiscal third - poop consequence , Apple chief executive officer Steve Jobs said that the opening of the first two Apple Retail Stores was “ perhaps the most strategic event of the one-quarter . ” The fellowship afford 25 more memory board over the rest of that year . Apple reported full sales of $ 5.4 billion in 2001 , with the Apple Retail Stores responsible for $ 19 million . Apple did not describe whether the Apple Retail Stores generated a profit or a loss , but it ’s probably safe to say that they had a disconfirming event on Apple ’s bottom occupation that year .
The losses uphold for the next two years — the stores failed to get out even after the 2001 vacation shopping season , as the company desire it would . But the numbers overall were supporting . In 2002 , Apple opened 13 more shop , and reported $ 283 million in retail sales ( full sales of $ 5.7 billion ) , and a release of $ 22 million by the retail section . In 2003 , Apple opened 25 new computer memory , report $ 621 million in retail sales ( total sales of $ 6.2 billion ) , and , most importantly , carry a loss of just $ 5 million by the retail section .
2004 to 2010: The profits roll in
In the fourth quarter of 2003 , the Apple Retail Stores reported its first profit . In 2004 , the Apple Retail Stores had its first profitable year — and have never depend back . With 21 new stores , Apple report a $ 39 million profit for the retail section on $ 1.2 billion in retail sales ( $ 8.3 billion in entire sale ) .
Retail sales and profits continued to grow , with young records being set after each yr . The Apple retail functioning in 2008 report , for the first fourth dimension , a annual net income of over $ 1 billion ( $ 1.3 billion , to be more exact ) . In 2010 , Apple reported a whopping $ 9 billion in retail sales and $ 2.4 billion in retail net income . With such impressive results , it ’s not far - fetched to await the Apple Retail Store to generate well over $ 10 billion in sale for 2011 . In fact , for just the first two fiscal living quarters of 2011 , Apple report retail sales agreement of over $ 7 billion , and a profit of $ 1.8 billion .
One metric used to measure the financials of a retail store issales per hearty foot , which is the average revenue generate for every square foundation of sales space . This metric function is used to judge the efficiency of a retail operation ; the higher the sales per square foot , the good . Jeweler Tiffany & Company ’s $ 2700 per straight foot used to be considered the gold standard , but Apple has surpassed Tiffany , generating more than $ 4000 in sales per satisfying metrical unit . By comparison , Best Buy ’s sales per straight foot is about $ 1000 , and Walmart ’s is about $ 400 .
The Apple Store on Fifth Avenue in New York City generated sales of more than $350 million–about $1 million per day–in 2009, according to Bloomberg. (Photo courtesy of Apple.)
Approaching a billion served
“ The interesting number , though , to me , is not the financial results , but it ’s the people who get along to our stores . Because ultimately a storehouse is about customer , ” said Apple older VP of retail Ron Johnson at aconferencein 2006 .
Apple did n’t commence to describe on the number of store visitors until the third quartern of 2002 . For about a class after the McLean and Glendale stores unfold , there ’s no publicly available selective information on how many people visited an Apple Retail Store .
Based on the number that are available , though , the Apple Retail Stores see lots and mint of hoi polloi . In 2003 , 13.9 million people visited an Apple Retail Store . That number nearly double ( 25.2 million ) in 2004 , and it nearly duplicate again ( 50.7 million ) in 2005 . In 2007 , the tally passed the 100 million mark ( 102.4 million ) . In 2010 , 233.3 million multitude walked through the room access of an Apple Retail Store .
For 2010 , that ’s an norm of about 718,000 visitors per store per year , or about 13,800 visitors per week . By equivalence , say Apple ’s Ron Johnson in a2004 delivery , Gateway , the PC company that had its own retail chain , “ promote that they had 250 visitors a week ” in Gateway ’s best weeks in 1998 and 1999 .
From 2001 to 2006 , Apple Retail concenter on the Mac and iPods . The iPhone was introduced in 2007 , which boosted the number of computer storage visitors — who can leave the long descent ? The crew came out again when the iPad was introduce last year . Whenever a fresh iPhone or Pad is released , more and more people take the air though the door of an Apple Store , and often they ’re buying more than just a gimmick . They ’re also buying cases , earphone , and other accessories . And they might even be buying a raw Mac to go along with that newfangled iOS twist .
An undeniable success
“ Why has it worked ? ” asked Johnson in a2004 speech . “ I think it ’s all about Apple ’s earthing in blueprint being apply to a different business from products — to a retail scheme . ”
As the phone number show , there ’s no denying that the Apple Retail Stores are successful . They not only generate a significant amount of revenue , but they also process as a daily showcase for Apple products in an inviting place setting that feels more societal than sales - oriented .
How does Apple keep the impulse that the Retail Stores have ? It ’s the products that bring people in the doors , and mighty now the iPhone and iPad are what people come to see and bribe . It ’s quite possible that when the smartphone and tablet markets suppurate , demand for those products will not be as high as they are now . That will take several long time , however — twelvemonth that Apple has to come up with its next big affair .
When Apple harbinger its plans for the Apple Retail Stores over 10 years ago , many had doubts that the store could be a achiever — after all , similar attack by other computer makers had not make out well . But as the numbers show , the Apple Retail Stores are big money makers and , as psychoanalyst George Rosenbaum put it , a “ brilliant mind . ”
[ cut-rate sale data was provided byifoAppleStores.com . ]
