Apple Stores are so incredibly popular that the owners of shopping malls all across America give them a cut on their rent, according to a Wall Street Journal report.
One analyst firm the Wall Street Journal spoke to has found that an Apple Store can raise the overall sales to any mall it’s in by up to 10%, meaning that mall operators have an interest in keeping them happy and safely in place. In some New England malls, Apple Stores can account for as much of a third of overall mall sales.
Where a typical mall tenant may pay around 15% of sales a square foot in rent, Apple has been able to knock it down to 2% of sales a square foot in some locations. Most Apple Stores generate $US6,000 in sales a square foot, while some go up to $US10,000, per the report. Figuring a 2% rate, that means your average Apple Store pays between $US120 and $US200 per square foot to the mall operator ever month.
It’s not quite the sweetheart deal that a Macy’s or a Sears would get, since those stores are better at encouraging people to stay in the mall and keep shopping. But it’s a far better deal than many get.
“As department stores close, Apple is replacing them as the main driver of traffic to the mall,” Integra Realty Resources chairman Raymond Cirz told the Wall Street Journal.
As a pleasant side effect for mall operators, it means that they can demand higher rents from other mall tenants. In fact, some chains like Lush Cosmetics have taken to asking malls to give them the sales rate without Apple included before they decide whether or not to open there, just to make sure it’s not inflating the numbers.