Apple Pushing Eastward, Has Plans For Moscow Store

Top executives of Apple’s retail team visited Moscow (Russia) last month to finalize a decision on leasing space inside the trade gallery of the historic and reconstructed Hotel Moskva, just steps away from Red Square, the Kremlin and other historic sites frequented by locals and tourists. The hotel and retail facilities are currently in the final stages of construction, and could open by late 2011 or early 2012. It would be Apple’s first store in Russia, and indicates a significant commitment to expand the company’s chain into Eastern Europe. According to sources, Sr. V-P Retail Ron Johnson and V-P Real Estate Bob Bridger visited Moscow at the end of March and toured the three-level retail space in the future Four Seasons Hotel. The two were seen examining a 16,000 square-foot, two-level space as a possible Apple store. At the time, no lease had been signed, but a decision could be made soon, sources say. Right now, the eastern-most Apple store in Europe is the just-opened Altmarkt-Galerie in Dresden (Germany). It’s the only store within a former Communist state, the German Democratic Republic (East Germany). There are no Apple stores in any of the 15 republics of the former Soviet Union (USSR), which dissolved in 1991.

The original Stalin-era Hotel Moskva opened in 1935 as part of a rebuilding plan for Moscow. It anchors the northern end of Red Square, is 300 feet from the “zero kilometer” marker for all Russian roads and within steps of several main subway stations. The original architecture featured an imposing stone façade for passersby, and a window view of Communist military parades for hotel room guests. Over 75 years, it has hosted hundreds of world figures and celebrities, and even more high-level Russian dignitaries and politicians.

In 2002, Moscow mayor Yuri Luzhkov promoted plans to demolish old buildings within the city and build new ones. The plans included demolishing the interior of the Hotel Moskva, but retaining the façade for a new, upgraded five-star hotel. The demolition was opposed by architectural conservation groups, who said that many historical details would not be preserved, but Luzhkov’s proposal prevailed.

Since then, construction work has been slowed by politics, funding issues and the economic downturn. The Canada-based Four Seasons hotel chain agreed to operate the 185 rooms, 44 residences, 82 apartments, office space and conference rooms. It’s the first Four Seasons hotel in Russia. Real estate brokers Cushman & Wakefield are handling leasing for the 226,000 square-feet of retail space on the ground, first and second floors of the hotel.

Moscow is home to 11.5 million residents which had a growing middle-class—and potential Apple products buyers—before the 2008 global economic downturn. The city hosts millions of tourists each year, almost all visiting Red Square and the surrounding area where the Hotel Moskva is located. But tourist visits are down by 10 percent from pre-2008 levels, and only slowly increasing recently. Moscow and other Russia cities are optimistic that the upcoming Sochi 2014 Winter Olympics and the 2018 FIFA World Cup soccer matches will bring more tourists and improve the country’s economy.

Trivia: The façade of the Hotel Moskva is featured on the label of Stolichnaya vodka, since Stolichnaya is the adjective for “capital city.” In 2005 construction workers on the hotel project found crates containing 2,000 pounds of explosives in the underground levels of the building. The charges were apparently set in 1942 to destroy the building if German forces took Moscow, which they never did.

The hotel is across the street from a three-level, underground shopping complex, Okhotny Ryad, marked with large glass dome skylights, much like the Carousel du Louvre (Paris) shopping mall where Apple has a retail store.

Read more about the old hotel’s history and the future trade gallery. Check some additional history at the hotel’s former Web site, and a collection of photos from the old hotel’s demolition.

The hotel's original architecture in 2002 just as reconstruction was beginning

The front of the hotel as it appears now, after a complete reconstruction. Interior construction work continues for a late 2011 or early 2012 grand opening