Apple Stores Stagnate During Fruitless Search For A Leader

Apple's (NASDAQ:AAPL) retail stores, once an engine of retail innovation, have essentially been frozen since 2011 in terms of customer experience, according to the Wall Street Journal.

The chain hasn't had a specific executive in charge since the firing of John Browett last year—and Browett's tenure was marked by cost cutting at the level of reducing associate training, slashing stationery budgets by 30 percent and even reducing supplies of replacement T-shirt uniforms that store associates are required to wear. Apple CEO Tim Cook has been nominally in charge of the stores since he fired Browett.

As a result, the stores have stagnated, with sales falling 4.5 percent per square foot of store space. While Apple's current $4,542-per-square-foot sales still make it more profitable than Tiffany (NYSE:TIF) at $3,453 or Lululemon (NASDAQ:LULU) at $2,464, it's clearly going in the wrong direction.

Direction is also a problem in the 10-month search of a new stores chief. Several high profile retail executives have reportedly turned down the job, either because they believed it would be impossible to change the Apple culture or because Apple's top management doesn't appear able to outline a clear direction for the stores going forward.

And that lack of direction is the core problem in Apple Store stagnation. In the past, "You had different products and services emerging almost every quarter," said a former Apple Store associate. But since the departure of Ron Johnson, who left Apple for a disastrous 18-month stint as CEO of JCPenney (NYSE:JCP), "the stores have been basically the same from a customer-service point of view."

The irony that Johnson's move from Apple to Penney's made both chains worse off isn't lost on retail observers. The real question is what Apple can do now. It has reportedly rejected the idea of an inside candidate. Outsiders don't know what they'd be expected or allowed to do. And there's no indication that Apple has talked to Johnson, whose magic as the executive who built Apple Stores over a decade seems to have fled.

Meanwhile, the stores Johnson created—now apparently frozen in amber—represent the model for format revamps at chains ranging from electronics stores to phone stores to drugstores. If Apple can't restore its mojo soon, that's where the engines of retail innovation will be.

For more:

- See this Wall Street Journal story

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