Malls Give Apple Special Treatment. Is It Paying Off?

by MR Magazine Staff

For the past few years, various governments and media publications have pointed a spotlight on Apple’s tax-minimization efforts, which allow it to park over $111 billion offshore. The New York Times published another big piece this week detailing more of the company’s efforts to keep its tax burden as low as possible. Apple’s tax maneuvering is not unique. Many other large companies take similar strategies. However, Apple’s scale is mostly unrivaled. The company booked over $215 billion in overall sales in 2016. More than 25% of these sales came from Apple’s own retail properties, both online and offline, and 75% came from third-party retail, such as phone carriers like Verizon and electronics stores like Best Buy. (In 2017, Apple’s direct sales have grown to 28%, as the company relies more on its own distribution.) Out of this 25% of direct sales for 2016, close to 90% of it occurs offline in Apple’s nearly 500 retail stores. That’s about $48 billion total in overall retail sales or $97 million per store. Various market reports say the company pushes over $5,000 per square foot in its stores, with each store averaging around 17,000 square feet. Close to 500 million people visit Apple stores each year, but only 1 out of every 100 buys something, according to former retail head Ron Johnson. While Apple is not alone with its tax strategies, it’s in a league of its own when it comes to retail productivity—and bargaining power. Read more at Loose Threads.