Photo: via YouTube
Apple is about to open a new store in the middle of New York’s Grand Central Terminal, and it looks gorgeous. But, how much money is the new 23,000 square feet store going to make?
Well, Apple stores make $4,406 per square foot, according to investment bank Needham & Co, but that’s just an average of all of Apple’s outlets everywhere in the world.
The Grand Central store is probably going to make a lot more money. Why? Location, location, location.
- First of all, the store is in New York, which is full of tourists who want to splurge on things and people who on average make more money than elsewhere. According to the Terminal’s website, 50% of commuters’ household incomes are over $100,000, and 20% are over $200,000.
- Just the sheer amount of foot traffic. An iron rule of the retail industry is that sales grow with foot traffic, always. And Grand Central Terminal certainly gets a lot of traffic: 750,000 people daily and 1,000,000 over the holidays, they say.
So, how much money might the store make?
By way of comparison, retail broker Jeffrey Roseman estimates that Apple’s Fifth Avenue store makes $350 million in revenue per year, or $35,000 per square foot. That’s an astounding number. That would make Apple’s Fifth Avenue store the biggest seller in the avenue, bigger than Tiffany’s.
But Apple has a way with hitting astounding numbers. Retail analyst Madison Riley thinks the number is possible, noting that both New York retail and Apple stores are outliers.
Of course, some things about the Fifth Avenue store won’t apply: it’s open 24/7/365, and Grand Central Terminal isn’t. And Fifth Avenue is one of the priciest shopping districts in the world. And Apple has restrictions on how it can use the historic space in Grand Central.
But let’s say Apple could get its sales per square foot to $20,000. In a 23,000 foot store, that would work out to $460 million in revenue, or close to half a billion dollars.
Those are very high numbers, and it’s anybody’s guess what Apple’s actual Grand Central sales will be. But given Apple’s track record, those numbers are also possible.