Costly refits spark Apple Premium Reseller shake out

Some APRs expected to give up the ghost to avoid £100,000-plus store upgrades

Apple stands to have fewer Apple Premium Reseller (APR) partners come January as hefty store refit costs force some to relinquish their top-tier status.

By the end of December, all APR stores must conform to the snazzy new V2 format as Apple bids to improve user experience within its partners' outlets. Some stores have been given extensions on the deadline to ensure they are not refitting in the busy pre-Christmas period.

But with the cost of a refit estimated at a cool £110,000, some APRs cannot afford to upgrade, or feel the return will not justify the investment.

The high-end furniture alone – which must be bought from one German supplier – is known to cost about £60,000, more than twice as much as the £15,000-£30,000 outlay associated with V1 stores.

ChannelWeb knows of at least one APR – which wished not to be named – that has opted not to make the investment and will instead step down to Authorised reseller status. This follows the closure of Cancom's three APR outlets in the wake of its acquisition by Trams in March.

APRs have known what was expected of them for two-and-a-half years and all APR stores set up since 2010 will have the V2 design.

However, one APR branded Apple's policy of dictating that all fittings are bought from one supplier as "bureaucracy gone mad".

"It is a tremendous amount of investment for very little return on margin," they said.

Not all feel the same way, with Howard Cole, managing director of Albion Computers, which runs seven APR stores – including two older stores that needed refits – among those to back the process.

"We have recently upgraded one of our locations and have seen reasonable growth," he said. "Some of the stores are quite old and in the retail world you need a refresh on a reasonably regular basis."

Cole admitted V2 stores are expensive but hailed the quality of the format, including the high-end corian surfaces and built-in security systems.

Paul Mills, marketing manager at APR AT Computers, agreed that the new format does improve customer experience.

"I am disappointed that there may be stores closing or companies that will exit the programme," Mills said. "But it will probably strengthen the brand in the UK, as it will be the stronger companies that can afford to keep this programme alive."

Another APR source said he understood that the upgrade process would force out "one or two smaller" players but that all the bigger outfits remain committed to the programme.