Apple backs off retail
With the world economy down on its luck, almost everyone is cutting back somewhere. Apple is cutting back by not opening retail stores and cutting its retail staff.
Apple opened just one new retail store over the last quarter, and that may well be one more than it will open during the coming quarter. After opening 250 stores in eight years, Apple’s rapid retail expansion has finally been stopped by sluggish sales in the economy as a whole. On top of that, the Cupertino computer giant has downsized its retail sales force over the last few months, moving from about 15,600 to about 14,000. A work force loss of 10 percent or so might not sound bad in Detroit, but it’s a big number for Apple.
Apple COO Tim Cook recently called the environment in which his company is working “a horrendous economy.” Even though Apple’s overall revenues grew at an 8 percent annual rate during its second fiscal quarter, the average Apple retail store sold 17 percent less, tumbling to $5.9 million from $7.1million in that quarter a year ago, according to a Fortune blog. It is apparent that the “horrendous economy” is keeping people out of Apple retail stores, just like it is most other stores.
None of this is likely to mean that Apple will start closing retail stores any time soon, except perhaps for renovations, as has happened recently. It’s most recent SEC filing says that Apple-owned stores require a “substantial investment in fixed assets and related infrastructure, operating lease commitments, personnel, and other operating expenses. … The Company would incur substantial costs if it were to close multiple retail stores.”
In some ways, then, Apple actually is subject to market forces. Sometimes one has to wonder. The diversification of the company into different markets has truly paid off during the current recession. Sales of the iPhone, not to mention those billion apps, have helped the company to overall results that are much better than those of their competitors. If you have to imitate somebody in a bad economy, you could do much worse than to ape Apple.
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April 24th, 2009
All you have to do is come up with revolutionary, best of class product once a year or so to emulate them.
Should be easy enough.
April 24th, 2009
Let’s look at FTEs from a year ago, and then extrapolate for the additional stores.
Here are the numbers:
March 2008 = ~12,000 FTEs
March 2009 = ~14,000 FTEs
Both figures were preceded by the word “approximately”, so they are clearly + or – 500 FTEs. Around 17% more FTEs this year than last, HOWEVER…, you have to factor in the number of stores open.
March 2008 = 205 stores
March 2009 = 251 stores
So, number of stores increased by 22%, and FTEs increased roughly 17%, but given the vagueness, the range would be from, 8% to 26%.
In other words, the increase is in the margin of error. Much ado about very little.
April 26th, 2009
Lets see, Apple had 15,600 “full time equivalent” positions at the end of last quarter. But they only have 14,000 “full time equivalent” positions at the end of the current quarter. Could there be a reasonable explanation for this? Hmmmm… let me use my brain a bit since the author of the article apparently does not have one.
The end of last quarter was the end of December. The end of the current quarter was the end of March. So why would a retailer have fewer people working for them at the end of March as opposed to the end of December? Gee, I wonder! Perhaps it has something to do with the fact that the Christmas shopping season does not occur in March!!!
Of course there are going to be more people on the payroll at the end of December. They are called “seasonal employees” for a reason.
What a pathetically lame attempt at journalism.