While every other major retailer is experiencing a slow down in sales, Apple’s line of retail stores continue to impress, a fact which is no more evident than at the Apple Store located on Fifth Avenue in New York City.
According to a report today on Bloomberg, business at Apple Stores continue to “defy the recession”, with revenue at its stores increasing by 2.5% in the past 6 months, all while other retailers struggle to remain afloat in an extremely tough economy, their sales slumping.
According to analysts, one of the chief catalysts behind Apple’s somewhat surprising retail success in a challenging economic environment was its semi-recent decision to reduce the price of the iPhone 3G down to a much more affordable $99 price point. The report notes that foot traffic at Apple Stores increased 22% in the wake of the announced price change.
While strong sales are always nice, the success of Apple’s retail stores really becomes glaring when looked at in the context of how much merchandise they sell per square foot of store space. Apple’s Fifth Avenue store location, for example, rakes in an estimated and jaw dropping $35,000 in sales per square foot, a figure which might make it the “highest grossing retailer ever on Fifth Avenue”, according to the report.
By way of comparison, the famous jeweler Tiffany’s rakes in about $18,000 per square foot while diamond dealer Harry Wintson, also known as a “jeweler to the stars”, earns an estimated $13,000 per square foot of retail space.
The report goes on to note that Apple has been “thrilled” with the performance of its 3 New York retail stores, so much so that it plans to open up a fourth store on the Upper West Side in late 2009. It’s almost like Kevin Costner in “Field of Dreams” – if you build it, they will come… and spend money.
Of course, it’s easy for the Apple Store on Fifth Avenue to be successful considering that it’s open 24 hours a day 7 days a week. Believe it or not, I once popped in at the Apple Store on Fifth Avenue at 2am (don’t ask) and the place was packed with an assortment of hipsters, tourists, and people waiting to have their products looked at by someone at the Genius bar. Oddly enough, Apple Stores have almost become popular hangouts, what with their free Internet access and all.
When Apple first announced its retail initiative, critics scoffed at its chance for success. Now, Apple arguably has the most popular and successful line of retail stores in the US. Go figure.