GO
Loading...

Apple Stores Most Productive US Shops

Apple stores are the most productive shops in the US according to new research that suggests the most effective use of retail space is selling expensive products that are occasional purchases for well-off consumers.

The tech group recorded sales per square foot of $6,050 in the year ended June, making it the most productive chain ahead of the jewelerTiffany & Co and Lululemon Athletica, which sells yoga clothes, according to data from Retail Sails.

Apple's store productivity has risen sharply in recent years as consumers have flocked to buy iPhones and iPads. But last year it lost its head of retail to JC Penney and his replacement, John Browett, left abruptly last month after six months in the role.

Some specialist high-end stores had "eye-popping" productivity while most big box retailers that sold large volumes of commodity products were far less productive, said Gerry Mason, executive managing director at Savills, a real estate group.

"It's a tale of two retailers," he said. Analysts expect the contrast between winners and losers to be sharpened by another competitive end-of-year shopping season, whose most important day, Black Friday, will be on November 23.

Even among the top performers, Apple was well ahead of its peers. Its productivity was twice as good as Tiffany, which had sales per square foot of $3,017 in its latest 12 months of earnings. Lululemon in third place reached $1,936.

Opinion is divided among retail watchers over how much the success of Apple's 390 global stores comes from their sleek design, sparky staff and mobile check outs and how much comes from the huge popularity of Apple devices.

"Consumers get excited about the product," said Robin Lewis, chief executive of The Robin Report. "Attached to that is also a learning process. You've got these young, attractive [store staff] and they're all addicted to the brand themselves."

Mr. Browett, the short-lived head of Apple retail and a former head of British electronics retailer Dixons, is reported to have tried to cut costs by reducing part-time staff.

Ron Johnson, his predecessor, is seeking to apply Apple methods to JC Penney, a tired department store, but so far his transformation has triggered a precipitous fall in sales. JC Penney's sales per square foot are $128, according to Retail Sails.

Fourth and fifth in the retail productivity rankings were Coach, a handbag maker with sales per square foot of $1,871, and Michael Kors, a fashion group whose figure was $1,431.

Then came Select Comfort, which owns Sleep Number stores that sell mattresses that can cost several thousand dollars.

"They make two or three sales and that makes the whole day for them in an individual store," said Mr. Mason.

The top ten was completed by True Religion, a denim specialist; Vera Bradley, which sells colorful bags; Birks & Mayors, a jeweler; and Fairway, an upscale supermarket.

Wal-Mart US had sales per square foot of $424. By selling high volumes of groceries and general merchandise to low-income consumers, it is in many ways the antithesis of Apple.

More than half of Apple's 72,800 full-time employees worked in its retail stores as of September. Apple said its average revenue per store increased 19 per cent last year to $51.5 million.

Contact Technology

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    To learn more about how we use your information,
    please read our Privacy Policy.
    › Learn More

Squawk Alley