Alright...without getting into a detailed argument of economics.....
Eugene, the very fact that you named this thread what you did shows either:
A) You have ZERO understanding of the retail business and businesses in general.
You are super-pessimistic.
Perhaps both?
Here is how things are: It can take years and years to make a new business/division profitable. The biggest problem at the outset is start up expenses. Apple had to put money into researching locations, leasing locations (which costs more at the beginning), remodeling the stores, advertising for sales help, stocking the stores, etc...
Many of the above expenses will diminish if not cease over time. Not all, but many. Each store has cost hundreds of thousands to open. Just the upfront leasing fees come to thousands, I imagine. They will be replacing stock instead of starting from sratch. There will be little employment advertising.
There is little to worry about here. They will be fine. As far as paying their employee's too much....well that is highly subjective. If you think they just made the salary numbers and benefits numbers up by throwing a pair of dice, then you need to have your head examined. I am quite sure they have done their homework. Do you know how GOOD a "slight loss" for say, two years in a new retail chain is? It is VERY good. There are massive start up expenses. You have no idea.
I just can't even believe you with this thread! "Apple stores STILL unprofitbale". STILL? WTF did you think was going to happen? It has been like 7 months...STILL? WTF????
They will be fine. The first store did half a million in its first like three days. Yeah, they are screwed!!!!!!!!
I do have to agree that there may be too many people per store. Though, it may be only be during light-traffic times. I don't know that everone is on salary...they may be hourly in some cases.
My suggestions would be:
1) They need some type of overhead sign. I was looking for the store at Tice's Corner and still had trouble seeing it. If someone WASN'T looking, how would they see it?
2) Price tags as you mentioned
3) Genius Bar: Here is the thing, when I buy a Gosh Darn $300 base station from you, you could at least pop in my airport card that my wife got me w/o charging me $30. They ought to offer some courtesy services. People would like that and start talking about how great the service is.
<strong>I seriously doubt that employee paychecks put the Apple Stores in the Red. That's just silly -- your overhead would have to be ludicrous. the leases for the store spaces alone probably cost more than the employees.</strong><hr></blockquote>
possibly. they are buying and leasing some expensive property
Sure that not being profitable in the first year is bad. [it is generally common among retail chains]
Sure that market penetration does not increase over time. [this one doesn't make sense, how does retail chains increase customer base if more people do not become interested over time? and do note that for many "interested" is simply that they discover the store for the first time]
I am sure a sane person such as yourself can answer those simple questions.</strong><hr></blockquote>
Ignoring context, aren't we? Word of mouth goes so far, then you need reasons to go back. This is where hit products come in...but you can't be dependent on hit after hit to stay in the black ink. The Cube lasted longer than I would have allowed.
And no, I don't it's wise to forecast a profit only to have the retail sector slightly weakened by 9/11. Retail dropped only slightly, thanks in part to a complete lack of holiday travel. Not being profitable when you say you will be is silly indeed.
Market penetration increases when a new store is opened. Market acceptance increases when the stores offer something not offered by the competition, or when you advertise. Offerings can include service, unique products, prices, whatever.
I'll say, you would be making virtually the same amount of money as a chip design intern at nVidia in Santa Clara vs a Mac Genius at the Palo Alto Apple Store.
<strong>Eugene, the very fact that you named this thread what you did shows either:
A) You have ZERO understanding of the retail business and businesses in general.
You are super-pessimistic.
Perhaps both?</strong><hr></blockquote>
Perhaps. I'm not business major...I had no intention to suck up to profs to get into Haas. But turn back the clock over a year ago, and my vision for these stores was right on the dot...right down to the big screen used for presentations and advertisments, the digital solutions stations, the hardwood floors, the upper-crust locations.
But it's not like I can get into Ron Johnson's head.
Comments
Eugene, the very fact that you named this thread what you did shows either:
A) You have ZERO understanding of the retail business and businesses in general.
Perhaps both?
Here is how things are: It can take years and years to make a new business/division profitable. The biggest problem at the outset is start up expenses. Apple had to put money into researching locations, leasing locations (which costs more at the beginning), remodeling the stores, advertising for sales help, stocking the stores, etc...
Many of the above expenses will diminish if not cease over time. Not all, but many. Each store has cost hundreds of thousands to open. Just the upfront leasing fees come to thousands, I imagine. They will be replacing stock instead of starting from sratch. There will be little employment advertising.
There is little to worry about here. They will be fine. As far as paying their employee's too much....well that is highly subjective. If you think they just made the salary numbers and benefits numbers up by throwing a pair of dice, then you need to have your head examined. I am quite sure they have done their homework. Do you know how GOOD a "slight loss" for say, two years in a new retail chain is? It is VERY good. There are massive start up expenses. You have no idea.
I just can't even believe you with this thread! "Apple stores STILL unprofitbale". STILL? WTF did you think was going to happen? It has been like 7 months...STILL? WTF????
They will be fine. The first store did half a million in its first like three days. Yeah, they are screwed!!!!!!!!
I do have to agree that there may be too many people per store. Though, it may be only be during light-traffic times. I don't know that everone is on salary...they may be hourly in some cases.
My suggestions would be:
1) They need some type of overhead sign. I was looking for the store at Tice's Corner and still had trouble seeing it. If someone WASN'T looking, how would they see it?
2) Price tags as you mentioned
3) Genius Bar: Here is the thing, when I buy a Gosh Darn $300 base station from you, you could at least pop in my airport card that my wife got me w/o charging me $30. They ought to offer some courtesy services. People would like that and start talking about how great the service is.
<strong>I seriously doubt that employee paychecks put the Apple Stores in the Red. That's just silly -- your overhead would have to be ludicrous. the leases for the store spaces alone probably cost more than the employees.</strong><hr></blockquote>
possibly. they are buying and leasing some expensive property
<strong>
Sure the word of mouth has hit its peak.
Sure that not being profitable in the first year is bad. [it is generally common among retail chains]
Sure that market penetration does not increase over time. [this one doesn't make sense, how does retail chains increase customer base if more people do not become interested over time? and do note that for many "interested" is simply that they discover the store for the first time]
I am sure a sane person such as yourself can answer those simple questions.</strong><hr></blockquote>
Ignoring context, aren't we? Word of mouth goes so far, then you need reasons to go back. This is where hit products come in...but you can't be dependent on hit after hit to stay in the black ink. The Cube lasted longer than I would have allowed.
And no, I don't it's wise to forecast a profit only to have the retail sector slightly weakened by 9/11. Retail dropped only slightly, thanks in part to a complete lack of holiday travel. Not being profitable when you say you will be is silly indeed.
Market penetration increases when a new store is opened. Market acceptance increases when the stores offer something not offered by the competition, or when you advertise. Offerings can include service, unique products, prices, whatever.
I'll say, you would be making virtually the same amount of money as a chip design intern at nVidia in Santa Clara vs a Mac Genius at the Palo Alto Apple Store.
<strong>Eugene, the very fact that you named this thread what you did shows either:
A) You have ZERO understanding of the retail business and businesses in general.
Perhaps both?</strong><hr></blockquote>
Perhaps. I'm not business major...I had no intention to suck up to profs to get into Haas. But turn back the clock over a year ago, and my vision for these stores was right on the dot...right down to the big screen used for presentations and advertisments, the digital solutions stations, the hardwood floors, the upper-crust locations.
But it's not like I can get into Ron Johnson's head.
The problem...
1) Per store, I think Apple has hired too many people.
2) Apple is probably paying these people more than it should.
3) Apple needs print and/or TV ads to explain and acknowledge its retail presence.
4) 3rd party hardware prices and specs aren't clear. If you walk to the podium with the digital cameras, there are no price tags or item descriptions.
<hr></blockquote>
The Problem:
- 1: The economy
the iPod is the exception for at least the former. Expensive gadgetry does not fare well in recessions.2: Non-recurring costs. They are in investment phase.
3: Few truly compelling/cost effective products at the moment. See 1.
Combine the high visibility storefronts with better products and a recovering economy you will see a profit.
That last post was the most egotistical I have read in a while.
And secondly, you didn't directly address my questions, you just disputed them.
[ 12-31-2001: Message edited by: Eugene ]</p>