Fifth Avenue Apple store said to gross $35,000 per square foot. Can it be true?
There may be a new top retailer on Fifth Avenue in New York City, one of the priciest shopping districts in the world, and it doesn't sell fancy baubles or super-chic ensembles, according to real estate experts.
Try iPods, iPhones, and everything else Apple. Yes, that's right, Apple may now be the highest grossing retailer on Fifth Avenue, per square foot, according to real estate experts cited in a Bloomberg story out today. (The video is here.)
Apple's flagship store across from The Plaza hotel, "probably has annual sales of more than $350 million, topping any of the chain's other outlets," Jeffrey Roseman, executive vice president of real-estate broker Newmark Knight Frank Retail told Bloomberg.
At 10,000 square feet, that would put its annual sales per square foot at $35,000, a simply staggering figure by any measure.
There is good reason to be skeptical of the figure, if for no other reason than the number means that Apple is selling about $1 million worth of merchandise every single day of the year at the store. Put simply, $35,000 per square feet in gross sales is simply astronomical, even in New York.
On the other hand, Apple's Fifth Avenue store may be unlike any other retail operation in the world, in terms of location, traffic, product, and sheer buzz. Madison Riley, a retail analyst at Kurt Salmon Associates, a global retail consultancy, told DailyFinance in an interview that while the number sounds extremely high, it is certainly possible.
"This is simply an amazing store," Riley said. "I have never seen anything like it. The best I have heard was a Las Vegas specialty retailer that was operating at $12,000 [per square feet] and that is a number that I know is accurate."
"Nevertheless," Riley added, "Apple's performance is extraordinary. It is indicative of a well positioned brand whose store value proposition is also clear and well executed. They offer strong product innovation and an highly engaging store experience where the customer in fully engaged before, during and after the sale."
Riley said that sales figures in New York are often "outliers" -- figures that stray far from the average. As a result, "it is not uncommon to have the highest performing stores be in New York or in Las Vegas."
Bloomberg points out that such an astonishingly high gross number is equivalent to selling one Mercedes Benz C300 sedan per square foot, according to Faith Hope Consolo, chairman of the retail leasing and sales division at Prudential Douglas Elliman Real Estate.
Another way to think about this figure is that Apple sells the rough equivalent of Britain's annual GDP per-capita in each of its 10,000 square feet in its Fifth Avenue store. Even amid a brutal economy with retail sales across the country down nearly 10 percent, according to the U.S. Commerce Dept., Apple's store-based sales continue to rise, reaching some $3 billion in just the first six months of 2009.
If true, the $35,000 per square foot number is sure to make any Apple fanboy giddy, but it's important to note that the store, which first opened in 2001, is in one of the highest trafficked areas of Manhattan -- at the southeast corner of Central Park -- and is open 24 hours-per-day, seven days-per-week, 52 weeks-per-year.
As someone who used to live nearby, I can tell you that I simply will not go into the Apple Fifth Avenue store during daylight hours, unless it's a mission critical emergency, because it is too packed. The best time to go is after midnight, and even then the store sees brisk business.
Consolo, of Prudential Douglas Elliman Real Estate, says that by comparison, Tiffany & Co. sells $18,000 per square feet of its world-famous baubles, while Harry Winston sells $12,000 to $13,000, according to the Bloomberg story.
"We do not break out our revenue on a per store basis," said an Apple spokesperson.