[OT] Apple retail stores
The big problem I have with AAPL is decision to go to retail outlet stores.
How much will this cost.
They will likely start losing their ass IMO.
Watch that cash start to go south.
The number I've heard for opening up their retail stores is $85 million, or 24c/share, out of their cash hoard of about $11/share. I have no idea if this is the cost of opening up only those stores they are planning for 2001, or if it includes operating costs, or what. But I don't think it will represent a big portion of their budget. They're only opening something like 25 stores this year.
But the point is, although more than half of Apple's sales are through its online store, Apple NEEDS a competent retail presence, both for sales and for service, and they sure weren't getting that from Sears or CompUSA or any of those other stores that hire snide high school kids to sell computers. And whether or not opening Apple stores is the right thing to do, they're going about it right way, by hiring Gap execs and choosing upscale gallerias.
My hunch is that the stores will be a success for Apple, and will be absolutely essential when they get into newer consumer markets like wireless web tablets, networked A/V devices, and Internet radio stereo components. This may be absolutely the worst time to start a retail venture, but on the other hand there's a lot of empty retail space now at the high-end, and they're not betting the company on the stores.
Dave |
