Apple ditching plans for Israeli store after rejections by mall owners

Posted:
in General Discussion
Apple has reportedly scrapped plans to launch any Israeli retail store in the near future, despite potentially lucrative sales.

The Azrieli Sarona Tower in Tel Aviv.
The Azrieli Sarona Tower in Tel Aviv.


The company had been considering a shop at the base of the Azrieli Sarona Tower, a skyscraper in Tel Aviv, but the Azrieli Group rejected proposed financial terms, according to Haaretz. The paper further claimed that no mall owner in the country has been willing to accept Apple conditions, leading to it stepping back after a year or more of searching.

One of Apple's demands was help covering marketing and inventory costs, a Haaretz source said. The company has made similar demands for carriers selling iPhones, despite it making tens of billions in profits each quarter.

Apple has been met with at least two other cases of resistance to retail plans in the past year. These include a proposed store in Melbourne, Australia, which even after a redesign is facing opposition to a prerequisite demolition. In Stockholm, Sweden, the public and local government turned against a shop that would've appeared in the historic Kungstradgarden. Apple may now be trying to sell the land back to the city at a higher cost than it paid.

Israel is one of the richer countries in the Middle East, with many residents enjoying a Western-level lifestyle. Apple products are imported and sold exclusively by resellers though, contributing to high prices.
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Comments

  • Reply 1 of 43
    MacProMacPro Posts: 19,712member
    Oy vey!
    GeorgeBMacStrangeDays
  • Reply 2 of 43
    GeorgeBMacGeorgeBMac Posts: 11,421member
    And again, the Israeli people lose.
    monstrosity
  • Reply 3 of 43
    Why ditch Plan A? @apple. What you do is Improvise, adapt, and overcome is a powerful way of thinking. Saddens me to see a once great company stick its tail between its leg not to run and hide in the corner. Come on @apple!!!
  • Reply 4 of 43
    croprcropr Posts: 1,120member
    If I would apply the App Store guidelines to the brick and mortar Apple Store, Apple should give a 30% cut to the owner of building iso. asking to finance  marketing and inventory costs.
    jbdragonfranklinjackcontyler82Carnage
  • Reply 5 of 43
    jbdragonjbdragon Posts: 2,301member
    I have to say, this is just more of Apple looking greedy. Apple is making a ton of money and doing that at the expense of everyone else. If Apple wanted to rent or build someplace, I'd do a 50% markup Apple Tax to Apple.
    Carnage
  • Reply 6 of 43
    wood1208wood1208 Posts: 2,904member
    jbdragon said:
    I have to say, this is just more of Apple looking greedy. Apple is making a ton of money and doing that at the expense of everyone else. If Apple wanted to rent or build someplace, I'd do a 50% markup Apple Tax to Apple.
    Not sure why people blame Apple. It is a simple business decision. If Mall owner wants to be greedy,unfriendly, non cooperative than Apple has no choice. Apple has withdrawn opening site in places where locals are non-cooperative,hostile.
    patchythepiratebb-15lkruppronnqwerty52StrangeDayschia
  • Reply 7 of 43
    ravnorodomravnorodom Posts: 692member
    I have to say American company in general likes to push hard when it comes to making deal. And yet foreign companies like to push their employees to work their butts off (even here in U.S.).
  • Reply 8 of 43
    payecopayeco Posts: 580member
    jbdragon said:
    I have to say, this is just more of Apple looking greedy. Apple is making a ton of money and doing that at the expense of everyone else. If Apple wanted to rent or build someplace, I'd do a 50% markup Apple Tax to Apple.
    Apple singlehandedly drives substantial foot traffic to places their retail stores are located so they can demand these kind of concessions. There are reportedly some malls here in this US that are kept afloat entirely by the customers the Apple Store brings; and without the Apple Stores these malls would likely have to close. 
    edited April 2019 patchythepirateforgot usernameravnorodombb-15ronnStrangeDaysnarwhal
  • Reply 9 of 43
    gatorguygatorguy Posts: 24,153member
    wood1208 said:
    jbdragon said:
    I have to say, this is just more of Apple looking greedy. Apple is making a ton of money and doing that at the expense of everyone else. If Apple wanted to rent or build someplace, I'd do a 50% markup Apple Tax to Apple.
    Not sure why people blame Apple. It is a simple business decision. If Mall owner wants to be greedy,unfriendly, non cooperative than Apple has no choice. Apple has withdrawn opening site in places where locals are non-cooperative,hostile.
    Apple is reported to demand free rent along with marketing assistance from some malls. That's hardly the mall being greedy is it?
     https://www.curbed.com/2015/3/16/9980488/apple-retail-stores-get-sweetheart-deals-at-malls
    https://www.igeeksblog.com/mall-owners-in-israel-not-accept-apple-terms-conditions-01042019/
    edited April 2019 80s_Apple_GuyCarnage
  • Reply 10 of 43
    racerhomie3racerhomie3 Posts: 1,264member
    cropr said:
    If I would apply the App Store guidelines to the brick and mortar Apple Store, Apple should give a 30% cut to the owner of building iso. asking to finance  marketing and inventory costs.
    What are you talking about? This is real life ,not a paid app.
    bb-15
  • Reply 11 of 43
    gatorguygatorguy Posts: 24,153member
    cropr said:
    If I would apply the App Store guidelines to the brick and mortar Apple Store, Apple should give a 30% cut to the owner of building iso. asking to finance  marketing and inventory costs.
    What are you talking about? This is real life ,not a paid app.
    Racer, it's common for mall tenants to pay a portion of their revenues to the mall owner, at least here in the US. 
    80s_Apple_GuyCarnage
  • Reply 12 of 43
    flydogflydog Posts: 1,123member
    jbdragon said:
    I have to say, this is just more of Apple looking greedy. Apple is making a ton of money and doing that at the expense of everyone else. If Apple wanted to rent or build someplace, I'd do a 50% markup Apple Tax to Apple.
    Just FYI, the goal of a for-profit business is to.... turn a profit.  Giving your landlord more rent than is necessary is not consistent with that goal.  

    By your analogy, the next time you're due for a raise at work you should decline it so as to not seem "greedy."  Plus it's obvious you're already paid enough to make ends meet.
    edited April 2019 bb-15ronnStrangeDaysJFC_PAchia
  • Reply 13 of 43
    nguyenhm16nguyenhm16 Posts: 203member
    jbdragon said:
    I have to say, this is just more of Apple looking greedy. Apple is making a ton of money and doing that at the expense of everyone else. If Apple wanted to rent or build someplace, I'd do a 50% markup Apple Tax to Apple.
    I don't know where it's written that Apple or any other company has any obligation to open a store anywhere. In this case it didn't work out for both sides, so they walked away. That's just business, no hard feelings and all that, and nobody is the "good buy" or the "bad guy". Free hand of the market and all that. Landlords often take a percentage of a tenant's revenues as additional rent, if an Apple store brings tangible benefits to a property, why wouldn't/couldn't/shouldn't Apple try to capture some of those benefits?
    bb-15ronnStrangeDays
  • Reply 14 of 43
    wood1208 said:
    jbdragon said:
    I have to say, this is just more of Apple looking greedy. Apple is making a ton of money and doing that at the expense of everyone else. If Apple wanted to rent or build someplace, I'd do a 50% markup Apple Tax to Apple.
    Not sure why people blame Apple. It is a simple business decision. If Mall owner wants to be greedy,unfriendly, non cooperative than Apple has no choice. Apple has withdrawn opening site in places where locals are non-cooperative,hostile.
    The only greedy party here is Apple who despite sitting on billions of $ and profits that every other company drools over insists on terms that no one else gets or even asks for. Apple has become what they fought against Microsoft for so long trying to survive in the 80's 90's etc. The big bad bully. 
    edited April 2019
  • Reply 15 of 43
    flydogflydog Posts: 1,123member

    If I would apply the App Store guidelines to the brick and mortar Apple Store, Apple should give a 30% cut to the owner of building iso. asking to finance  marketing and inventory costs.

    Tenants already pay landlords for those costs.  It's called rent, and for most mall tenants it is generally a much higher percentage of revenues than 30%. 
    ronn
  • Reply 16 of 43
    mobirdmobird Posts: 752member
    My previous experience in mall leases were that the tenant would pay a fixed per square foot amount with a percentage override of net sales. Both of these amounts would be negotiated on the front end. For a retailer to ask for help with marketing and inventory is different. The mall owner/management company is the party responsible for all mall marketing, advertising, and promotions. If the tenant wants to advertise their brand/products that is totally up to the tenant and at their own expense. Asking for help in carrying the inventory, give me a break. But if they can get that concession, why not?
    gatorguyentropys
  • Reply 17 of 43
    seanismorrisseanismorris Posts: 1,624member
    payeco said:
    jbdragon said:
    I have to say, this is just more of Apple looking greedy. Apple is making a ton of money and doing that at the expense of everyone else. If Apple wanted to rent or build someplace, I'd do a 50% markup Apple Tax to Apple.
    Apple singlehandedly drives substantial foot traffic to places their retail stores are located so they can demand these kind of concessions. There are reportedly some malls here in this US that are kept afloat entirely by the customers the Apple Store brings; and without the Apple Stores these malls would likely have to close. 
    No one else drives traffic?  That’s disrespectful to every other company in the mall/location.

    Mall’s in the US are struggling for relevecy, but that’s not true everywhere else in the world.

    Apple does look bad, and not a good neighbor.  If Apple demands concessions, other tenants will have to pay for them in higher rent.

    Apple has some questionable business practices lately.  My high regard is declining.
  • Reply 18 of 43
    nguyenhm16nguyenhm16 Posts: 203member
    payeco said:
    jbdragon said:
    I have to say, this is just more of Apple looking greedy. Apple is making a ton of money and doing that at the expense of everyone else. If Apple wanted to rent or build someplace, I'd do a 50% markup Apple Tax to Apple.
    Apple singlehandedly drives substantial foot traffic to places their retail stores are located so they can demand these kind of concessions. There are reportedly some malls here in this US that are kept afloat entirely by the customers the Apple Store brings; and without the Apple Stores these malls would likely have to close. 
    No one else drives traffic?  That’s disrespectful to every other company in the mall/location.

    Mall’s in the US are struggling for relevecy, but that’s not true everywhere else in the world.

    Apple does look bad, and not a good neighbor.  If Apple demands concessions, other tenants will have to pay for them in higher rent.

    Apple has some questionable business practices lately.  My high regard is declining.
    I don't know why people ascribe any sort of morality to this. There are no good and bad guys in this, only business. Apple was in its rights to ask for whatever it thought it could get, and the landlord was within its rights to say yes or no. In this case the parties couldn't come to an agreement and parted ways, again that's business.

    However, this seems to be the exception rather than the rule when you consider all the grandiose and not so grandiose Apple stores that have opened all over the world. It would not be unreasonable to assume that Apple drove similarly hard bargains at each of those locations yet those landlords must have thought juice was worth the squeeze.

    In my city, Microsoft even relocated their store from the "glamorous" end of the mall (with the Tiffany, Chanel, Neimans, Gucci, Prada, etc. type stores) to a more "pedestrian" part of the mall (where the GAP and Bath and Body Works are) right next door to the Apple Store (which had also doubled in size since it opened).
    tmayronnStrangeDays
  • Reply 19 of 43
    wood1208 said:
    jbdragon said:
    I have to say, this is just more of Apple looking greedy. Apple is making a ton of money and doing that at the expense of everyone else. If Apple wanted to rent or build someplace, I'd do a 50% markup Apple Tax to Apple.
    Not sure why people blame Apple. It is a simple business decision. If Mall owner wants to be greedy,unfriendly, non cooperative than Apple has no choice. Apple has withdrawn opening site in places where locals are non-cooperative,hostile.
    Why is the mall owner greedy just because they don’t want to pay for Apple’s marketing and inventory costs?
    80s_Apple_Guydasanman69
  • Reply 20 of 43
    bb-15bb-15 Posts: 283member
    wood1208 said:
    jbdragon said:
    I have to say, this is just more of Apple looking greedy. Apple is making a ton of money and doing that at the expense of everyone else. If Apple wanted to rent or build someplace, I'd do a 50% markup Apple Tax to Apple.
    Not sure why people blame Apple. It is a simple business decision. If Mall owner wants to be greedy,unfriendly, non cooperative than Apple has no choice. Apple has withdrawn opening site in places where locals are non-cooperative,hostile.
    The only greedy party here is Apple who despite sitting on billions of $ and profits that every other company drools over insists on terms that no one else gets or even asks for. Apple has become what they fought against Microsoft for so long trying to survive in the 80's 90's etc. The big bad bully. 
    Nonsense; 
    1. Microsoft drove software companies like WordPerfect & Lotus, into the ground (with unfair practices).
    Mall tenant rent has nothing to do with that.
    2. Apple’s terms in your words are greedy. By your “thinking” Apple’s unreasonable terms should = zero Apple Stores.
    Fact; there are 504 Apple Stores worldwide. This shows that Apple’s terms can be considered acceptable by many mall owners.
    3. In the history of retail not every store location/construction deal gets done. Apple is not obligated to agree with every landowner’s terms.
    4. Apple Stores support the brick & mortar retail model. What company is hurting physical store retail the most? Amazon.
      
    edited April 2019 StrangeDays
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