Report: Apple stores outperform Best Buy, Saks and Tiffany
How productive are Apple’s (AAPL) retail outlets?
“Out of this world” according to a report issued this morning by Toni Sacconaghi of Bernstein Research. In fiscal year 2007, he estimates, Apple stores generated an average of nearly $4,500 in sales per square foot — a figure far higher than any other consumer electronics or luxury retailer. That’s nearly five times the productivity of Best Buy, for example, one of the most efficient consumer retail outlets, and nearly 12 times that of Saks. Only Tiffany & Company comes close, with sales of $2,750 per square foot. (see charts at right)
The findings were part of a follow-up to the in-depth report on Apple’s retail strategy that Bernstein Research issued a year ago. Since then, Apple has opened 20 new stores (total: more than 200) and reportedly has plans to expand to China, France, Germany and elsewhere.
Among the report’s other findings:
Mac sales per store grew 26 percent year-to-year in fiscal 2007. Apple’s brick and mortar stores sold an average of 8,000 Macs in 2007, or a “stunning” 21.4 per day.- Apple Stores boosted the company’s total revenue by at least $1.35 billion (5.6 percent) during the year, with gross margins of 42 percent (versus 34 percent for Apple overall)
- Despite the high gross margins, the stores have somewhat lower profitability than the company overall because of high operating expenses. The average Apple Store has 40 full-time-equivalent employees, double the number four years earlier. All told, Sacconaghi estimates that the retail segment’s operating margin was 16.9 percent for the year, compared with 18.4 percent for Apple overall.
lol..the apple hypemachine does another fact bending trick….
their stores are what…1000 sq feet…best buy 60,000+
like it or not, the apple is rotting and only the most stuborn of retarded consumers will keep eating it…(yes, there are still those types out there)
again…shiny packaging will never gain more than the low single digit percentages of market share…no matter how small their stores are or how high their prices.
it is painfully obvious at this point to me, most if not all writers about apple, own apple…they have no choice but to spin stories of grandure out of shiny packages and call them technological wonders all in the biased name of propping up their stock.
figure the simple numbers…apple is WAAAAY overvalued even more than it was a year ago.
no company can keep that type of momentum without actually giving something to the industry…apple only copies tech and puts it in shiny packaging..
their P/E is astronomical coupled with low growth equals WAAAY overvalued company – the simplest of market minds knows that is a sell, sell, sell equation; compared to the de-factos such as ms, hp and dell….there is only one economic conclusion:
the apple is about to fall from the tree…once that happens, it can only rott unless they can actually contribute good, useful technology to the industry….. one thing that most must admit they haven’t done….shiny does not mean inovative….sad but true.
Duh, fewer stores per people, and higher prices for their hardware kinda helps this dontcha think?
Those numbers are amazing to me. I think part of it is that since there are fewer Apple stores across the country the company can concentrate on uping the wow factor. Of course it doesn’t hurt to have a product like the iPhone either.
I explored the design strategy of Apple stores in:
Apple Store strategy: “Position, permission, probe”
and also published an exclusive interview with Alex Frankel whose recently released book details the preparation given to Apple store employees for that unique experience in:
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Silicon Valley veterans like to joke that Steve Jobs must be surrounded by a reality distortion field; if you get too close to him, you start to believe what he's saying. Thanks to the success of the iPod, the launch of the iPhone and the renewed interest in the Mac, Apple has made believers out of millions of customers - and made a lot of investors rich. But Philip Elmer-DeWitt believes that an ounce of skepticism never hurts when writing about the company. He should know. He's been covering Apple - and watching Steve Jobs operate - since 1982, first for Time Magazine, then for Business 2.0, and now for Fortune.
This is an extremely flawed article. As the other comments have noted this is like comparing apples and oranges. Apple has more high end items and a much smaller footprint than the average Best Buy. You would be better served by looking at the square footage that the Apple products at a Best Buy store occupy, determine the sales of those items and then determine the “apple sales / apple square footage” and compare that to the apple stores. Probably still beat Best Buy but then I can’t buy an HP computer or a 52 inch SONY plasma screen TV to watch the movies I download at Amazon.com from an Apple Store, now can I.