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Apple retail commitment, headcount surge over 55 percent

With its total store lease commitments fast approaching $1 billion, Apple Computer has no plans to slow development of its extremely successful retail segment and will utilize approximately $360 million in capital expenditures during the 2007 fiscal year to facilitate new store openings.

That represents an 80 percent increase over fiscal 2006, when it spent $200 million to open 41 new retail stores, including a total of 10 international stores in the U.K., Japan, and Canada. During that same time, the company's total retail lease commitments also rose from $609 million to $887 million.

Since its inception in 2001, Apple has spent over $729 million on its retail store strategy, including the construction of eight elaborate "high-profile" or flagship locations that function as vehicles for general corporate marketing, corporate events, and brand awareness.

By the end of its 2006 fiscal year on September 30, the Cupertino, Calif.-based company operated 165 locations comprised of more than 1.2 million square feet of retail space. Included in that mix are 147 stores in the U.S. and a total of 18 additional stores spread across Canada, Japan, and the U.K. That compares to 124 open stores as of September 24, 2005 and 86 open stores as of September 25, 2004.

The fastest chain in the history of retail to reach the $1 billion mark for sales, Apple's retail segment continued to reflect phenomenal growth during fiscal 2006. Net sales increased by 43 percent to $3.4 billion compared to 2005, including an increase in Macintosh unit sales of 45 percent to nearly 900,000 units.

With an average of 142 stores open during fiscal 2006, average revenue per store also increased to $23.6 million compared to $22.4 million during 2005 and $15.6 million in 2004. Apple attributed the increase in sales to "strong sales of Macintosh portable and desktop products, iPods, and other music related products and services."

"Sales of iPods increased primarily due to the introduction of the updated iPod with video-playing capabilities in October 2005 and the iPod nano during September 2005," Apple said in a filing with the Securities and Exchange Commission. "Macintosh portable and desktop sales increased due to strong sales of the Intel-based MacBook, MacBook Pro, and iMac."

Apple Store Fifth Ave

Shoppers flood Apple's flagship retail store on Fifth Avenue in Manhattan this past October

The increased traffic at company stores also sparked a more than 57 percent rise in retail employee headcount, as Apple added 2,114 to its store staff during fiscal 2006, bringing the total to approximately 5,787. That's more than a quarter of the company's employee base, which as of September 30, 2006 was estimated at 17,787 full-time equivalent employees and an additional 2,399 temporary equivalent employees and contractors.

Among the many forthcoming Apple retail outfits slated for 2007 are the first two retail stores in Scotland, and new flagship locations in both Paris and New York City.