Apple almost bigger than all retailers combined

CBS

(MoneyWatch) COMMENTARY Apple (AAPL) is notoriously deft in retail. Its stores bring in by far more dollars per square foot of selling space, on the average, than any other retailer. But, as Tyler Durden at the blog Zerohedge.com noted, Apple's market cap is $14 billion away from being bigger than the entire U.S. retail sector.

Oops, sorry, that was with a market cap of $558 billion yesterday. As of this morning, Apple opens nearly 3 percent up with a market cap of $568 billion. Better make it $4 billion, or another day of optimistic trading, away. But is there something just a little nuts about this?

To see the trend, here's a chart that shows Apple compared to retail as well as the U.S. semiconductor industry (which it already surpassed in size).

Bloomberg

There should be no doubt that Apple is at the top of the retail game. According to the company's annual report, it leases about 3 million square feet of retail store space. Its retail sales, which don't seem to include online sales, were $14.1 billion, up 44 percent over the previous year. That translates into $4,709 in annual sales per square foot, an industry-standard way of measuring retail performance.

Compare that to some other retail operations. Best Buy (BBY) had 58.1 million square feet of retail space worldwide under a variety of store brands, according to its most recent annual report. Global revenue was $50.3 billion, for a total of $865 per square foot in annual sales. That's overstated, as it would also include online sales.

Tiffany & Co. (TIF) -- the storied high-end jewelry firm -- had about 1 million square feet of retail space at the end of January 2011 (latest fiscal year end available) with net sales of $3.1 billion, or $3,100 per square foot for the year.

But now compare Apple's admittedly impressive sales with the actual U.S. retail sector. According to Census Bureau estimates, retail sales in 2011 were roughly $4.2 trillion, compared to Apple's $127.8 billion for calendar 2011 (rather than its fiscal year end numbers, which ran from October 2010 through September 2011). Or you could be even more conservative, drop auto sales from the mix, as in the table below, and still have $3.4 trillion.

In other words, even though U.S. retail sales are conservatively about 26 times as large as Apple's entire revenue, Apple is considered a far more valuable company by the market than the entire retail sector put together. But given that Apple has roughly $100 billion in cash, a market cap nearing $600 billion doesn't seem so outrageous. Maybe that says something more about the stock market in general than Apple in particular.

  • Erik Sherman On Twitter»

    Erik Sherman is a widely published writer and editor who also does select ghosting and corporate work. The views expressed in this column belong to Sherman and do not represent the views of CBS Interactive. Follow him on Twitter at @ErikSherman or on Facebook.

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