Fate of Apple mini stores hangs in the balance
Apple's retail plans are becoming clearer now that 2005 has slipped into March, including the future of the company's mini-store concept introduced just last October.
Apple doesn't comment on future stores, but at least 47 locations have been identified so far from Apple's Web site, news reports, tipsters and other sources. They include stores in brand new regions, as well as additional stores in existing regions and one new country--Canada.
Apple CFO Peter Oppenheimer has said Apple will have 125 stores open by the end of September, but based on job openings on Apple's Web site, that appears to be a conservative number. At least 25 locations have appeared on Apple's job listings page, signaling that those stores will open within the next six to seven months. That would give Apple at least 127 stores by the end of September, with three additional months of 2005 to open even more stores before the holiday shopping season. Based on Apple's average grand opening rate, the year could end with over 132 stores.
Apple's international plans also appear to be aggressive--Oppenheimer said 10 stores will be open in other countries by Sept. 30th, but only mentioned Japan, the United Kingdom and Canada as locations. Apple has acknowledged two future stores in the UK (Birmingham and Kent), and one each in Japan and Canada, leaving two additional locations among the three countries to be confirmed. It's believed that Kyoto and Umeda (Osaka) will be the next Japan stores, and that Manchester (UK) will also sprout a retail store. Beyond that, Paris is a firm future location, and Sydney (Australia) seem close behind.
As for the mini-stores that Apple introduced in Oct. 2004, no future stores are in the pipeline, apparently due to dissatisfaction among Apple executives with the design and materials. The stores' stainless steel siding is expensive to manufacture and import from Japan. The epoxy flooring, which replaced the original carpeting just before the stores debuted, has suffered through two rounds of structural problems, expensive repairs and replacements. The custom-built point-of-sale terminals, intended to allow customers to process their own credit card purchases, have never operated as designed.
Even the lighting at the mini-stores is an issue: the one-piece, back-lit ceiling is tough on the eyes, especially for employees who spend eight hours beneath the glow. And no matter where customers stroll in the store, they find themselves zapped in the eyes by the wall-mounted, point-of-sale laser barcode scanners.
At the same time, the stores are only marginally less expensive to operate than a 3,000 s.f. retail store. At least two of the five existing mini-stores occupy full-size mall spaces, but use the excess space for storage and not sales floor space. The stores are not located in bargain basement locations either, but rather in Apple's typical high-end malls. Both factors mean that the savings from operating a mini-store is only marginal.
So when mini-stores begin opening once again, expect to see some design changes, and perhaps even retro-fits for the existing stores.
Apple's retail plans are no doubt affected by the current computer retail scene: Gateway has closed down all of its 297 retail stores, and Dell is limited to kiosks in the courtyards of malls. Big guns IBM and H-P have no retail presence of their own, but rely on authorized resellers.
That lack of retail competition seems to give Apple a wide-open field. And supported by six straight quarters of profits, Apple's Retail segment seems to be on track for continued, if patient, expansion of its retail stores.
Gary Allen is the creator and author of ifo Apple Store, which provides close watch of Apple's retail initiative. When Gary isn't busy publishing news and information on Apple's latest retail stores, he finds himself hanging out at one.
Apple doesn't comment on future stores, but at least 47 locations have been identified so far from Apple's Web site, news reports, tipsters and other sources. They include stores in brand new regions, as well as additional stores in existing regions and one new country--Canada.
Apple CFO Peter Oppenheimer has said Apple will have 125 stores open by the end of September, but based on job openings on Apple's Web site, that appears to be a conservative number. At least 25 locations have appeared on Apple's job listings page, signaling that those stores will open within the next six to seven months. That would give Apple at least 127 stores by the end of September, with three additional months of 2005 to open even more stores before the holiday shopping season. Based on Apple's average grand opening rate, the year could end with over 132 stores.
Apple's international plans also appear to be aggressive--Oppenheimer said 10 stores will be open in other countries by Sept. 30th, but only mentioned Japan, the United Kingdom and Canada as locations. Apple has acknowledged two future stores in the UK (Birmingham and Kent), and one each in Japan and Canada, leaving two additional locations among the three countries to be confirmed. It's believed that Kyoto and Umeda (Osaka) will be the next Japan stores, and that Manchester (UK) will also sprout a retail store. Beyond that, Paris is a firm future location, and Sydney (Australia) seem close behind.
As for the mini-stores that Apple introduced in Oct. 2004, no future stores are in the pipeline, apparently due to dissatisfaction among Apple executives with the design and materials. The stores' stainless steel siding is expensive to manufacture and import from Japan. The epoxy flooring, which replaced the original carpeting just before the stores debuted, has suffered through two rounds of structural problems, expensive repairs and replacements. The custom-built point-of-sale terminals, intended to allow customers to process their own credit card purchases, have never operated as designed.
Even the lighting at the mini-stores is an issue: the one-piece, back-lit ceiling is tough on the eyes, especially for employees who spend eight hours beneath the glow. And no matter where customers stroll in the store, they find themselves zapped in the eyes by the wall-mounted, point-of-sale laser barcode scanners.
At the same time, the stores are only marginally less expensive to operate than a 3,000 s.f. retail store. At least two of the five existing mini-stores occupy full-size mall spaces, but use the excess space for storage and not sales floor space. The stores are not located in bargain basement locations either, but rather in Apple's typical high-end malls. Both factors mean that the savings from operating a mini-store is only marginal.
So when mini-stores begin opening once again, expect to see some design changes, and perhaps even retro-fits for the existing stores.
Apple's retail plans are no doubt affected by the current computer retail scene: Gateway has closed down all of its 297 retail stores, and Dell is limited to kiosks in the courtyards of malls. Big guns IBM and H-P have no retail presence of their own, but rely on authorized resellers.
That lack of retail competition seems to give Apple a wide-open field. And supported by six straight quarters of profits, Apple's Retail segment seems to be on track for continued, if patient, expansion of its retail stores.
Gary Allen is the creator and author of ifo Apple Store, which provides close watch of Apple's retail initiative. When Gary isn't busy publishing news and information on Apple's latest retail stores, he finds himself hanging out at one.
Comments
they've made great progress with Apple Stores, and sensing and evaluating that the Mini Stores don't appear to be cutting it, they are wise indeed to tone that plan down a little.
outside the USA/UK/Australia,
where i'm living right now, there's AppleCentres (about the size of a DECENT apple dealership or half the size of official USA Apple Store) and AppleCorners... kind of like Apple Mini Stores...
The AppleCorners seem to be too much of a tiny nook with not much demo models on display and not much stock on display, let alone space to demonstrate and encourage Switchers to walk in and "figure out" this Mac thing... The AppleCorners seem to be too much dependent on selling iPods, when iPods are already sold in many other small shops (iPod authorized resellers) selling WindowsPCs and consumer electronics, etc.
1 - South Shore Plaza - Braintree, Massachusetts
2 - Century City - Los Angeles, California
3 - Lincoln Road - Miami Beach, Florida
4 - St. John's Town Center - Jacksonville, Florida
5 - Pioneer Place - Portland, Oregon
6 - The Gardens at Palm Beach - Palm Beach Gardens, Florida
7 - La Cantera - San Antonio, Texas
8 - Green Hills - Nashville, Tennessee
9 - Woodland - Grand Rapids, Michigan
10 - The Woodlands - Houston, Texas
11 - Gateway Mall - Salt Lake City, Utah
12 - Yorkdale - Toronto, Canada
13 - Bluewater - Kent, England
14 - Bullring - Birmingham, England
15 - Crabtree Valley - Raleigh, North Carolina
16 - Bridgeport Village - Tualatin, Oregon
17 - Manhattan Village - Manhattan Beach, California
18 - Penn Square - Oklahoma City, Oklahoma
19 - Pentagon City - Arlington, Virginia
20 - Garden State Plaza - Paramus, New Jersey
21 - Northbrook Court - Northbrook, Illinois
22 - Florida Mall - Orlando, Florida
23 - Beverly Center - Los Angeles, California
24 - Shibuya - Tokyo, Japan
25 - Flatiron - New York City, New York
26 - Eastview Mall - Victor, New York
27 - Annapolis Mall - Annapolis, Maryland
I've posted this list before, but all of them now have listings for some job openings at Apple's site. Only the Jacksonville store has a confirmed opening date (March 18th.) If anyone is interested, these listings can be verified at Apple's Retail Jobs listings.
Second, my understanding of Oppenheimer's remarks were that there would be 10 international stores open by the end of the year (it's not clear now if he means fiscal year or calendar year) not 10 new stores. With the current four stores (Ginza, Osaka, Nagoya, and Regent Street) and the four confirmed by announcements and listings (Toronto, Bluewater, Bullring, and Shibuya) that gives us only two new international locations to be announced to meet Oppenheimer's figure. Gary, please correct me if I'm wrong - ten new stores would be wonderful.