Quote:Businessweek, Commentary: Sorry, Steve: Here's Why Apple Stores Won't Work
May 20, 2001
On May 19, Apple will open a swanky new retail store--the first of as many 110 nationwide--at Tyson's Corner Galleria mall outside Washington. While Apple execs won't comment on their plans, the idea seems clear: Well-trained Apple salespeople in posh Apple stores can convince would-be buyers of the Mac's unique advantages, including its well-regarded iMovie software for making home videos and its iTunes program for burning custom CDs....The way Jobs sees it, the stores look to be a sure thing. But even if they attain a measure of success, few outsiders think new stores, no matter how well-conceived, will get Apple back on the hot-growth path..... 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.
I would say this piece deserves a place in the EPIC WRONG Hall of Fame along with the likes of "Dewey Defeats Truman!" and "Supreme Court Strikes Down Mandate!" Guess what they say about "free advice" is sometimes true, lol.