Manhattan’s Fifth Avenue, renowned for its concentration of flagship storefronts and world famous luxury retailers like Tiffany’s and Harry Winston, has a new most popular destination: The Apple Store. The 10,000-square-foot Mac Mecca at the corner of 59th Street and Fifth Avenue in Midtown is pulling in an estimated $350 million annually (the company does not release individual store numbers). Based on that figure, the store is pulling in $35,000 per square foot annually, equivalent to selling a brand new Mercedes-Benz C300 per square foot, Bloomberg points out. Those figures make Apple the highest grossing retailer on Fifth Avenue.

Driven by iPhone sales, the company’s worldwide retail operation has defied the recession, with revenue inching up 2.5% to $3 billion in the first half of the year, even as U.S. retail sales have slipped 9.2 percent in the same period. As for Fifth Avenue, Apple’s neighbors along the world-renowned shopping corridor have seen 8-10% declines in sales. Tiffany & Co. peaks at around $18,000 in revenue per square foot annually, and jeweler Harry Winston brings in just $12,000. Neither of those companies has fared very well through the recession: Tiffany’s sales dipped 22% in the first quarter, and Harry Winston was even less dazzling, booking a 30% decline in revenue. Other non-luxury retailers on Fifth Ave., like Abercrombie & Fitch and Saks Fifth Avenue, saw 23% and 22% declines respectively.

Apple, meanwhile, still packs its Apple Store daily (and nightly), with lines pouring out of its iconic glass cube entrance and into the street when new products hit shelves (Apples newest version of its OSX operating system, Snow Leopard, arrives in stores Friday). Every product in the store is on display, encouraging shoppers to pick up and try the devices, giving them a feel for Apple’s sleek design. The stores regularly overstaff their outlets so customers can get swift service; the Fifth Avenue store alone keeps 500 staffers on its payrolls. The iPhone has also played a key role in keeping stores full, as consumers have shown a willingness to cut back on just about every other discretionary category before their mobile tech.

That Apple has become Fifth Avenue’s newest destination retail outlet comes on the heels of Microsoft’s announcement that it is jumping into the retail game as well, with plans to launch stores in Scottsdale, Ariz., and Mission Viejo, Calif, by this fall. More stores will follow, some right next to Apple outlets, the company has said. Here’s hoping the new Zune HD is everything the company is promising, as it appears unseating Apple in brick-and-mortar sales is going to be no small feat.

[via Bloomberg]