Thursday, December 08, 2011

When Apple pulls the veil off of its newest store on Friday, New Yorkers will get their first glimpse at the classical architecture-meets-computers retail space inside Grand Central Terminal.

Behind a temporary black facade, which has teased commuters for weeks with "arriving soon" messages, Apple has been negotiating aggressively and stealthily with contractors and government agencies to quickly secure a favorable deal. The Grand Central outlet is just one of several high-profile stores the company has been readying with characteristic covertness.

Interviews with nearly two dozen people involved in the development of upcoming and recently opened U.S. Apple Stores, including the one in Grand Central, provide a look at Apple's unusually furtive way of doing business. These people say Apple sometimes employs uncommon legal tactics, refuses to name itself in public documents and hearings, and has sworn city government officials to secrecy.

Apple's shrewd negotiating tactics are well known in other parts of its business. Nondisclosure agreements are strictly enforced with employees, contractors and partners, and punishment for disloyalty is swift and unforgiving.

For example, employees who leak internal memos may be fired as soon as they are discovered. When prototype iPhones were lost in bars in two consecutive years, police officers searched the homes of people suspected of possessing them.

But retail chains, especially those that sell electronics, aren't typically associated with controversy. And retail industry executives say Apple's demands for absolute secrecy in its store-development process are peculiar and unjustified.

An Apple spokeswoman declined to comment for this story.

'Apple is not typical'

As buzz grew about work on a Grand Central Apple Store, the Metropolitan Transportation Authority, which controls the station, spurned many interview requests -- even months after the store was unveiled at a public meeting in July. A New York Times editorial published in August lamented that procuring any details about the project "was like trying to uncover a state secret."

When reached by phone in October, MTA spokeswoman Marjorie Anders told CNN in response to a question about the soon-to-open Apple Store, "We're not talking about that." Why? "Because Apple doesn't want us to."

Is this typical?

"No, but Apple is not typical," Anders said. Further questions, she said, would need to be submitted in a formal Freedom of Information request, a government process that can take months to yield documents.

Grand Central is a historic landmark, meaning each project must go through an approval process. Apple asked for its architects to deal directly with New York's State Historic Preservation Office -- a role that's supposed to be handled by the MTA -- so the process was completed promptly, said Beth Cumming, a director for New York's State Historic Preservation Office.

Similar maneuvers are being used at other stores. Officials in Berkeley, California, referred questions about a new Apple Store to the city's formal public-records division. They offered two brief reports, one of which Apple did not list its name on.

"We generally don't talk about our customers," said Berkeley spokeswoman Mary Kay Clunies-Ross in a phone interview in September. "We're obviously glad that Apple is here and hope they will stay for a long time."

At a shopping mall in the Seattle suburb of Bellevue, Washington, where Apple already has a store, the computer company is opening a new one on the floor above, where clothing and jewelry stores used to be, according to public documents.

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