Apple (AAPL) jacked up the number of full-time employees working in its retail division by 61% to 26,500 in its fiscal year that just closed, according to the company's annual filing with the Securities and Exchange Commission. The move came as Apple rolled out its new addition to the i-line -- the iPad -- and retooled its iPhone with video chat, which helped to drive sales in the stores.

But despite the 47% retail revenue increase to $9.8 billion in fiscal 2010 over last year, sales for each retail-related employee declined 9% to $369,811, compared with last year. During the year, Apple operated a network of 317 stores.

Analyst Brian Marshall of Gleacher & Co. said despite the decreased efficiency in Apple's retail operation, it's totally worth it to ramp up staffing in Apple's stores.

"Apple's stores are jam packed, so it's a good user experience to have all those employees with their hand-held devices to swipe users credit cards," said Marshall. "At the end of the day, those employees are not that expensive and it's not a big deal because the foot traffic is increasing in the stores."

For Apple, its retail business is big. Retail net sales accounted for 15% of Apple's overall revenue pie of $65.2 billion in fiscal 2010. Last year, Apple's retailing operation took a hit, posting a 9% decline over the previous year.

As Apple gears up for the busy holiday selling season, Marshall's point of keeping customers happy with an adequate supply of retail staff will go a long way in making customers merry. And happy customers have the potential of turning into repeat customers.

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I think the implied 9% reduction in revenue per employee quoted in this article is incorrect. It appears to assume that the 26,500 employees quoted in the SEC filing were employed from the start of the year. Given the rapid growth staff numbers a better calculation would start with the average of this years and last years employment, i.e. about 21,500 employees - if so this would imply a growth in sales per employee of 21%.

October 28 2010 at 2:48 PM Report abuse rate up rate down Reply