Apples for Sale on New York City's Upper West Side
Apple's 280th retail store opens this weekend on Manhattan's Upper West Side.
Nov. 13, 2009— -- Shoppers walking midtown Manhattan's Miracle Mile could be excused for gawking more at Tiffany's multi-carat diamonds or Harry Winston's $100K necklaces than the $59 iPod shuffles a few steps away. But those who do are skipping the biggest money maker in one of the world's most exclusive shopping districts.
And now there's a new member of the club.
As with many of the company's retail outlets, the store's sleek design embodies the California-based computermaker's reputation for state of the art technology. And in New York at least the stores have also become commercial juggernauts.
The first New York City store replaced a post office in the popular SoHo shopping district, and last year a three-level all-glass store opened in the trendy meat-packing district.
But no store has been more visited than the 24-hour centerpiece of Apple's retail strategy, the glass-cubed structure in midtown, believed to be the highest-grossing retail outlet on Fifth Avenue. The store brings in an estimated $35,000 per square foot, nearly double that of neighboring Tiffany & Co. and triple that of Harry Winston, according to Jeffrey Roseman, executive vice president of real estate broker Newmark Knight Frank Retail in New York.
"We opened our first store in Manhattan seven years ago, and the response has been incredible," said Apple Senior VP of Retail Strategy Ron Johnson.
What started as an experiment in 2001 is now celebrated as one of the most successful retail store chains in the world. With an average store measuring 6,000 square feet, Apple stores have improved revenues from $10 million per store in 2001 to $26 million per store in 2009 while expanding into its 10th country.
Other electronics makers have not had the same success in the retail space. Microsoft, for example, is just starting to develop its own branded store.
"We have a 10-year head start," Johnson said.
Many scoffed at Apple when the company began building stores -- questioning the wisdom of buying expensive real estate when a customer might replace an aging computer at most every three years and could find cheaper prices online.
"Our plan was to find great locations. Bring the stores to where people shop," Johnson said. "And we wanted to ambush the Windows users."
In the past year Apple stores have hosted 170 million visitors, bringing in $1.4 billion in profit and changing over 1 million people from Windows to Macs in their retail stores, according to Johnson.
The company plans to open 40 to 50 more stores in "great locations, with great design and with great people" in 2010, including new "significant" stores in London, Paris and two in Shanghai, China.