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SAN
FRANCISCO—Cheng Jian Wei, on a 24-hour visit to New York
from China, was willing to risk missing his bus to the
airport for the chance to buy his son an iPod at Apple
Inc.’s Fifth Avenue store.
His
determination helps explain why Apple’s 178 US stores may
outshine other retailers in what is shaping up as a
lackluster holiday selling season. The National Retail
Federation predicts a 4-percent revenue gain in November
and December, the smallest since 2002, after consumer
confidence fell.
For Apple,
analysts forecast a 31- percent jump in total sales this
quarter to $9.31 billion as customers snap up iPods,
iPhones and Macintosh computers. Apple is making shopping
easier with concierges at the door, portable devices that
speed checkout and express bays stocked with its most
popular items.
AN Apple Computer Inc. logo
hangs in the center of a clear glass cube marking the
entrance to the new Apple Store in New York. The store
opens to the public 24 hours a day. (below) A shopper
samples the new red iPod nano at the Fifth Avenue Apple
Store in New York City . -- BLOOMBERG
“They now
produce some of the most-wanted products on the planet,’’
said Maggie Gilliam, a retail consultant at New York-based
Gilliam & Co. “The idea of getting one of these supersexy
products at one of these cool stores has great appeal.’’
Apple
opened its first retail outlet in May 2001 to boost
visibility of the Mac, the personal computer that
generates half its sales. The 203 Apple stores around the
world may draw 39 million shoppers this quarter, estimated
David Bailey, an analyst at Goldman, Sachs & Co.
The risk
may be that consumers’ holiday spending slows after the US
Thanksgiving weekend’s strong results, Bailey said. Apple
shares have more than doubled this year and need a
“continuous dose of earnings,’’ he said.
Goldman’s
Bailey projects holiday sales of 2.22 million Macs,
bucking the typical decline in sales after the
back-to-school season, when Apple sold a record 2.16
million machines. The New York-based analyst recommends
buying Apple shares.
More than
half of those who bought Apple computers in the third
quarter were making their initial purchase of a Mac, the
company said. Apple’s retail sales in the quarter rose 42
percent to $1.25 billion, 20 percent of the $6.22 billion
total revenue.
This
month, blue-shirted, clipboard-carrying concierges began
greeting and directing visitors to help handle the holiday
rush.
“We have
many customers coming into our stores for the first
time,’’ said Ron Johnson, a former Target Corp. executive
who joined Apple in 2000 to lead its retail strategy. “We
think a friendly welcome at the front door will make a
difference.’’
Apple
doubled the number of portable checkout devices, allowing
any staff member to ring up sales from the floor. More
than half of transactions are completed that way, Johnson
said in a November 15 interview.
Apple also
set up express bays before November 23, the day after the
US Thanksgiving holiday that is considered the start of
the American holiday shopping season.
The bays,
which it first used last December, are stocked with iPods
and Macs so customers can purchase products quickly.
For the
first time, Apple is selling its personal-training program
as a gift, Johnson said. For $99, users get a year of
hourlong, one-on-one weekly sessions on Apple products.
That’s in addition to its Genius Bars, where technicians
offer repairs and advice.
Apple is
adding 40 stores in fiscal 2008, including its first in
Beijing, Johnson said. Gene Munster, an analyst at Piper
Jaffray & Co. in Minneapolis, said having its own stores
draws new customers to Apple’s brand and keeps them coming
back.
Munster
observed “what can best be described as a gravitational
pull the stores had on mall shoppers’’ during the
Thanksgiving weekend, he wrote in a note to investors. He
has advised buying Apple shares since June 2004.
Shoppers
bought about 5.3 Macs an hour last weekend, compared with
4.3 in August, he said. Most Mac buyers visit the store
again within three months, Munster said. Shoppers at Best
Buy Co., the largest
US
consumer-electronics retailer, don’t return until they get
another PC, typically two years later, he said.
Cheng,
part of a delegation of government officials visiting the
US from China’s Zhe Jian province, bought his 16-year-old
son an iPod Touch. He said he went to the Apple store with
less than an hour before his bus departed for the airport
because the products are “high-class.’’
The Fifth
Avenue shop is the only one that operates 24 hours a day,
seven days a week. At 3:30 a.m. on a recent Saturday,
clerks answered questions and fixed iPhones for a stream
of customers while a janitor buffed the floor.
“They’ve
done a very professional job in creating a retail concept
and getting it up to speed,’’ said Gilliam, the retail
analyst. “It’s kind of a cool environment and you feel
like you’re part of the in crowd.’’ (With reporting by
Linda Shen and Denise Pellegrini in
New York) | 
