Here's how desperately cities want Apple stores

According to a report, Apple gets hugely preferential leases just to open its stores in certain cities and locations. Why is anyone surprised?

CBS Interactive

It seems that Apple is retail's Botox.

The minute an Apple store appears in a shopping mall -- or, say, a vast famous New York railway station -- somehow the area becomes prettier and more devastatingly young.

The Next Web reports that Apple is continually offered ludicrously favorable incentives just to be the next shiny dance partner for a city or a shopping mall.

Apparently, authorities in Grand Central Terminal and Salt Lake City didn't bother with annoying complexities as some (or any) rent or share of profit in order to encourage Cupertino to erect a little more glass, white and silver in their vicinities.

ABC News suggests that the Utah city offered 5 years free rent.

This follows from a New York Post report that Apple is only paying $60 per square foot at its new store in Grand Central Station -- as opposed to a restaurant that has to pay $200. Apple isn't even reportedly required to share any of its profits, as are almost all other stores there.

To many, this will seem like obvious business sense. Apple stores are constantly crowded with people who have the virtue of still possessing money -- or those simply keen on making dancing videos .

It's an interesting logic, though, that attracting Apple customers to an area will automatically make the local Ann Taylor or Benihana suddenly more attractive. It's surely more true that once an Apple store arrives, other more sexy establishments might follow.

However, to compare an Apple store with a restaurant is a little odd. There's one slightly significant difference between the two: restaurants tend to go bust rather more often than Apple stores. Some estimate that 27 percent of restaurants go down in the first year. Apple stores, on the other hand, don't seem to disappear as often.

If you really want to understand the truths of the restaurant business, there is no finer -- and more salty-tongued -- recent book than "Restaurant Man," written by Mario Batali's business partner, Joe Bastianich. This is a business that fights for margin past every piece of expensive linen and supplier fraud.

There again, surely Apple also chooses locations where it feels its stores will be able to beam with pride. It's not as if Grand Central, for example, is an entirely ugly (or cheap) location.

Indeed, only the other day I stumbled somewhat blindly into a Grand Central tapas restaurant called La Fonda Del Sol.

The wine was good and I was in the mood for a paella. I should have looked a little more carefully. When the check came, the paella was $68.

Of course, any retail area enjoys having an Apple store in its midst. But Apple stores also choose to be in places where ready cash is a-jangling.

Many might remember one of Steve Jobs' final presentations -- to Cupertino City Council. He was talking them into Apple's new alleged spaceship HQ .

During the presentation, one of the council members wondered why there wasn't an Apple store in Cupertino (other than on Apple's campus).

Jobs replied very politely: "The problem with putting an Apple store in Cupertino is that there just isn't the traffic."

 

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