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Apple Has a Problem and There's Only One Way to Fix It

By: Rocco Pendola | 08/05/14 - 08:00 AM EDT

Stocks in this article: AAPL

NEW YORK (TheStreet) -- Someone says something. Somebody else repeats it. If that happens enough times, the thing someone/somebody said can quickly become consensus. That cycle happens across society, but occurs with what feels like more frequency on the financial and tech media bandwagons.

This dynamic must be responsible for the seemingly agreed-upon notion that Angela Ahrendts must "fix" or "overhaul" Apple's (AAPL) retail stores. Why else would anyone suggest drastic change for a physical retailer that produces more than $4,500 in average sales per square foot? Apple tops that list again this year, ranking ahead of, for the most part, luxury names such as Tiffany & Co. (TIF) and Michael Kors (KORS). You know this, yet the media wants to convince you that Apple Stores require some sort of makeover.

Don't buy it. To some extent, Apple retail needs tweaking, but not Apple Stores.

Two "problems" exist. One Ahrendts can address; one that's out of her control.

Apple needs new products. Maybe it's just me, but there isn't quite the same buzz inside (and outside) Apple Stores as there used to be. The biggest lines are for the Genius Bar and there's a lot less browsing iPhones and iPads than there is using MacBooks to check email. That's not a criticism of Apple; it's reality. With no new products, it's only natural that the energy inside an Apple Store would be different than it is around a launch. It's Tim Cook's overhang -- no new products. But it shouldn't trigger finger pointing in entirely unrelated directions.

The media takes this relative lull, overblows it and spends the lag time dreaming up things that are "wrong with" or need fixing at Apple.

Bad move. If it ain't broke, don't fix it applies here. Not Apple needs to change its physical retail layout because it's old, stale and about to go out of style. Apple shouldn't do anything too extreme inside its stores; soon we'll see any signs of trouble were merely symptoms that resolve on their own with iPhone 6 and whatever else Apple is about to release.

Apple Stores need to be closer to exclusive. It's a thought trajectory I've been tunneling for some time now. The idea that Apple should pull its products from inferior third-party retailers such as Wal-Mart (WMT) and Best Buy (BBY) because, among other reasons, these companies don't care about and/or do a positive thing for Apple's image. It's purely shortsighted to point to revenue these retailers generate for Apple (even though nobody knows exactly how much it is) given the near- and long-term damage they can do to the brand.

Think about the juxtaposition. Products Apple markets as high-end and life-changing slum on the discount shelves of beleaguered Wal-Mart and jockey for space against everything under the sun at the agnostic and horribly desperate Best Buy. It should be difficult for Ahrendts to make sense of as she settles in as Apple's retail chief.

In any event, I spent a fair bit of the summer visiting California Apple Stores and, with the exception of I have everything that's in here, I see no problems. But I know I'll see massive lines whenever Apple gets around to releasing the Android-crushing iPhone 6.

--Written by Rocco Pendola in Santa Monica, Calif.

Rocco Pendola writes for TheStreet. He lives in Santa Monica. Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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