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Apple Builds Massive Glass Jai-Alai Court in New York

by John Paczkowski
Posted on November 12, 2009 at 12:16 PM PT

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aapljaialaiWhen it opens Nov. 14, Apple’s new Upper West Side store in Manhattan will be the company’s 280th worldwide, but it won’t be the newest store in the Apple empire for long. The company plans to open 40 to 50 more in 2010, some in locations like London, Paris and Shanghai.

A few of these will be what Apple (AAPL) refers to as “significant stores,” outlets that are striking in both appearance and location. With its 45-foot tall stone walls, vast glass ceiling and beacon that some say is “brighter than anything on Broadway,” the Upper West Side store certainly qualifies as that–as does Apple’s newly opened store at the Louvre in Paris.

Given their architecture and locales, these “significant stores” come with some equally significant expenses. But evidently, they’re worth it. According to Ron Johnson, Apple’s senior vice president of retail, annual revenue per store is now around $26 million. Altogether, Apple’s stores posted revenue of $1.87 billion in the September quarter, nine percent more than last year and their highest level ever.

[Image Credit: Matt Buchanan/Gizmodo, Flickr]

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  • Steve Ziring
    Maybe I don't get it but if I can purchase the same products at a BestBuy or AT&T store why pay for the overhead and liability associated with a brick and mortar store?

    Why in the year 2009 does a company with a proven track record selling online suddenly jump to open brick and mortar stores and at what cost?

    Hopefully Apple reviewed Gateways play book and came up a different game plan. Gateway too had a brilliant idea to open Country stores across the US. People could now see the product before they shelled out the cash; brilliant! They were very popular and so they decided to expand and expand they did. What Gateway failed to realize was those first couple of stores had tons of sales from people that didn't live anywhere near those stores. Often times driving great distances just to see and purchase the product. But 349 stores later the profits turned into expenses. Adding insult to injury and further complicating the justification for those stores several pre-built models became available on the shelfs of every Office Max. Only a few years after they reached 349 stores they closed them all down. Where are they now?
  • Andrew Augustine
    Steve,

    In business, often the difference between profit and loss is margin, and Apple’s margin is BIG. This year, 2009, Apple’s gross margin is over 30%, whereas Gateway’s margin was around 5% when they were creating all those stores.

    Why do companies pay big money to put their ads in Times Square? This is Apple’s way of doing Time Square – the fluff (all that glass) enhances the brand, and the store pay’s the bill. So look at the building; it’s much more than advertising (that is, to sell products). It’s about branding. All Best Buy can do for Apple is to sell Apple’s products. But it is up to Apple to increase the strength of the Apple brand. Still, you ask, why all that glass – how does it enhance the Apple brand? Simple, it’s called “Cool”. You may think it is boring, but the kid’s love it.
  • jack deed
    The only news here is that a store opened, apple has already stated it planned to open up to 50 stores this year.

    Amazing the way Apple manages to get the media to reprint the same story with new headlines dozens of times, with that kind of free cover, you could sell anything for twice the price.
    Whats next, "Apple staff eat lunch"
    or "Apple sells stuff to people"
  • Andrew Augustine
    Jack,

    I nearly agreed with you until I read the news about this new store opening.

    Don’t you agree that an 8,500 square foot store for a company that sells a hand-full of products is newsworthy? What about the fact that “the size and scale of the store, and the amount of stone that was used both eclipse any previous Apple store project”? Ok, we can skip the “stone” issue, but at least the article was newsworthy enough for you to read it!

    And in addition, you added your comment to this site :); so you just contributed to paying the salary of someone. That is why they write articles and report new about Apple.
  • Wow, Steve, have you been on the other side of the planet for the past eight years? Your questions were the very ones asked from people who warned Apple about going into retail when they opened their first two stores in 2001. I was at the opening of one of them, and the line wound out into the parking lot of the very large mall. Police told us there were 1,500 people lined up before the doors even opened.

    As it turns out, this is the single most profitable retail store on the planet. Not even Tiffanys in New York makes anywhere near as much money per square foot as the Apple stores do.

    And yes, people warned Apple about Gateway. I was friends with the guy who was a top VP at Gateway then, and I can tell you top executives at Gateway had no clue how to deal with their situation. Apple did their homework, they had the right product and they have the single-minded belief in what they are doing that doesn't exist anywhere else.
  • Kevin Kertes
    When the store is closed, does the illuminated Apple sign "sleep"? It should.
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About John

John Paczkowski has been poking fun at the tech industry and the personalities that drive it since 1997. From 1999 to 2007, he wrote the award-winning tech news Web log Good Morning Silicon Valley for the San Jose Mercury News, Silicon Valley's daily newspaper. Read more »

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Here is a statement of my ethics and coverage policies. It is more than most of you want to know, but, in the age of suspicion of the media, I am laying it all out.

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