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From the “Wayback” Machine: Apple Stores are Doomed

This BusinessWeek article, posted on May 21, 2001, explains all of the reasons why opening retail Apple stores would be a huge mistake for the company.

One of the best quotes:

Given the decision to set up shop in high-rent districts in Manhattan, Boston, Chicago, and Jobs’s hometown of Palo Alto, Calif., the leases for Apple’s stores could cost $1.2 million a year each, says David A. Goldstein, president of researcher Channel Marketing Corp. Since PC retailing gross margins are normally 10% or less, Apple would have to sell $12 million a year per store to pay for the space. Gateway does about $8 million annually at each of its Country Stores. Then there’s the cost of construction, hiring experienced staff. “I give them two years before they’re turning out the lights on a very painful and expensive mistake,” says Goldstein.

Fast forward to today:

From a New York Times article published on May 19, 2006 (almost exactly five years after the above BusinessWeek article was published):

Apple now has 147 stores — all but 14 in the United States — and is adding new ones at the rate of 40 a year. Sales at the stores more than doubled last year, to nearly $2.4 billion, and same-store sales, those open at least a year, increased 45 percent.


December 6, 2007 - Posted by | General, Mac

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