Neil Hughes
When the company's retail operations began 11 years ago, Apple initially targeted 6,000-square-foot stores as the ideal size, according to analyst Charlie Wolf with Needham & Company. As of Apple's fiscal 2011 10-K report, Apple's retail stores are now slightly larger, at 8,400 square feet per store.
But even as they have grown, Apple's retail stores are still "bulging at the seams," according to Wolf. That's because the number of visitors on a per-store basis has grown at a 15.3 percent annual rate, making the initial vision of 6,000-square-foot store just too small.
Apple's initial plans also called for the company to open around 100 stores. But at the end of the March quarter, Apple had a total of 363 retail stores open, with a third of them overseas.
"The company has had to rethink this strategy as the crowds have grown," Wolf wrote in a note to investors on Tuesday. "Apple is moving some existing stores to larger locations."
For example, Apple is currently expanding its store in New York City's SoHo neighborhood in Lower Manhattan. The project has required Apple to build a $1.4 million temporary store to serve customers while construction is underway.
Apple is also building a new, larger retail store in Palo Alto, Calif., just steps away from the original location, in order to better serve customers. The 15,030-square-foot project has been referred to by Apple as a "prototype" store that will draw on the company's more than 10 years of experience in designing iconic and heavily trafficked retail outlets.
In addition to expanding some current stores, Apple is also building new stores that are even larger. Among the new megastores are a 30,000-square-foot space in London's, Covent Garden, a 16,000-square-foot store with a giant glass cylinder in the Pudong district of Shanghai, and a 20,000-square foot space in New York City's historic Grand Central Terminal.
Marko Zivkovic
Malcolm Owen
Amber Neely
Christine McKee
William Gallagher
Andrew Orr
53 Comments
These stores can definitely use some more space. Every Apple store I have been to has been too crowded. My wife hates to even go in one now because they are so crowded. Good problem to have to deal with especially if you are a shareholder.
[quote name="kozchris" url="/t/149932/apple-retail-stores-bulging-at-the-seams-at-8400-average-square-feet#post_2106722"]These stores can definitely use some more space. Every Apple store I have been to has been too crowded. My wife hates to even go in one now because they are so crowded. Good problem to have to deal with especially if you are a shareholder. [/quote] Agreed. I've never seen an Apple store that wasn't packed with customers. Remember when Apple launched the stores? All the naysayers saying "Dell tried it and it didn't work" and "Apple is really doomed this time"..... It is really funny to see how it turned out.
Also funny how I read in Steve Jobs biography how at Apple "the board" tried to kill Steve's vision of these stores saying it was a huge waist of money and doomed to failure! LOL :-)
It is irritating how I have to drive over 100 miles to the other side of Memphis to the closest store. You'd think with the success of their products and huge amount of revenue they'd have many more stores. Probably another stupid board decision.....
The problem I see is how to improve customer flow and product layout if the issue is really just related to too many people coming through the doors. It's not like Apple has new products to showcase in another section of the store. It just comes down to how many tables of iPads, iPhones, MacBook's, etc each store can hold. The back-end of the store, where the 3rd party products are always seems to be the place where customers who couldn't get to a table of product go, or for those with a genius appt wait. It's not efficient, although I understand Apple sets up the stores this way to encourage add-on sales.
I would think they could sell more 3rd party products and rope consumers further into the ecosystem if they did a better job of having things like headsets, speakers, external drives, etc nearer to the Macs and i products. I can't tell you how many times my wife will put on one of the 3rd party headsets to listen to a song on an iPhone and comment how good it sounds and how comfortable they are. She could easily be sold on a pair if she didn't have to walk away to go find the model she was listening to. I would be the same if they had some great speakers, say the Zeppelin Air, setup for testing with my own iPhone and song choice.