Apple To Open 25 Stores In 2001, Break Even In 2nd Quarter, Profit In 2002

by , 12:35 PM EDT, May 15th, 2001

Apple officially launched its new chain of retail stores today with a new store in McLean, Virginia and another store in Glendale, California. The company also announced that the retail operations would break even in their 2nd full quarter of operations, and more importantly, turn a profit in 2002. "We expect the retail business to break even during the holiday quarter ending December 31. We expect a slight profit for fiscal '02," Chief Financial Officer Fred Anderson said to reporters at the opening event. The company has also issued a press release which says it will open 25 stores during 2001 and outlines the focus of the stores. According to Apple:

Apple® today announced that it will open 25 retail stores across the U.S. in 2001, with the first two stores opening this Saturday, May 19, at Tysons Corner in McLean, Virginia, and the Glendale Galleria in Glendale, California.

"The Apple stores offer an amazing new way to buy a computer," said Steve Jobs, Apple's CEO. "Rather than just hear about megahertz and megabytes, customers can now learn and experience the things they can actually do with a computer, like make movies, burn custom music CDs, and publish their digital photos on a personal Web site."

Knowledgeable salespeople will be able to demonstrate Macs® running innovative applications like iTunes and iMovie(TM), as well as Mac® OS X, Apple's revolutionary new operating system. All of the Macs are connected to the Internet, and several are connected to digital lifestyle products that complement the Mac experience, such as digital cameras, digital camcorders, MP3 players, and handheld organizers.

The Apple stores will carry over 300 third-party software titles for professionals and consumers, including some of the best educational titles for kids. Many of the computers in the store will be running popular third-party applications such as Microsoft Office and Adobe Photoshop.

The Apple store is organized into sections to make it easy for both first time and computer savvy customers:

• Products -- "Home" and "Pro" sections offer customers the opportunity to explore the full selection of Macintosh computers, displays and AirPort(TM), Apple's revolutionary wireless networking solution.
• Solutions -- Four separate sections allow customers to explore the latest digital lifestyle solutions. These solution areas show you how to get the most from your Mac -- through making desktop movies, using a digital camera to create stunning prints or photo albums on your personal websites, putting your entire music library on a Mac and burning custom music CDs with your favorite songs, and letting your kids explore the latest education software and games while you shop. Solutions also carries a wide assortment of the best third-party camcorders, cameras, MP3 Players, and PDAs.
• Genius Bar -- Where everyone is invited to ask the Mac "genius" questions, connect to the local Mac community or receive service. The Genius Bar is staffed at all times by the most knowledgeable Mac people in the local community. If they don't know the answer to a tough question, they can pick up the Apple "hot line" for immediate help from Apple headquarters.
• Theater -- Where customers can watch demonstrations of Apple's latest innovations, like our revolutionary new operating system, Mac OS X, on the store's giant 10 foot diagonal screen.
• Software -- Where customers have access to over 300 Mac software titles, including the best assortment of small business, entertainment, productivity, education, graphic, and web design titles.
• Etc. -- The Etcetera area contains a targeted selection of key products customers will need to round out their solutions: printers, scanners, tablets, cables, paper, ink and other accessories.

Apple's retail stores will carry inventory for every Apple and third-party product displayed to ensure immediate fulfillment.

Apple's stock was trading higher at press time at 23.59, up 0.30 (+1.29%).

The Mac Observer Spin:

The fact that Apple is anticipating its retail operations to break even in only the 2nd *full* quarter of operations, which is actually the 3rd quarter of operations, is amazing. Retail outlets are expensive to set up, expensive to run, and a big pain in the rear end. Gateway, for instance, has opened hundreds of retail locations and been forced to shut down some 37 of them in recent months because they weren't profiting. Apple, on the other hand, is obviously making sure that each and every one of their stores be financially profitable in and of itself. It's an interesting approach and the Street is sure to take notice. Apple never ceases to amaze us.

Apple Retail Store