Rachel Wells
March 14, 2013
The Age
Australian shoppers will be spoilt for international fashion choice in the coming years, with commercial property experts predicting a large-scale international invasion.
On Thursday, British fast fashion giant Topshop unveiled its third Australian store at the launch of Highpoint’s new $300 million fashion precinct in Melbourne’s inner west. Next week, it will be joined by Spanish fashion chain Zara when it opens its eighth Australian outlet at the redeveloped shopping centre. While developers are remaining tight-lipped, they have confirmed several more big-name internationals will follow in the coming weeks and months.
Once they get their network of stores running through Asia… it’s very easy then to just bolt on the Australian stores.
But the current trickle of international retailers to Australian shores – which began when Gap opened a flagship store at Chadstone in August 2010, followed by Zara’s first Sydney store in April 2011 – is about to become a tidal wave, according to a new report by one of Australia’s leading commercial property groups.
The report by Colliers International found that international retailers would establish 235 new stores and look for 220,00 square metres of Australian retail space within the next five years. The latest take-up of space from international retailers in Australia totalled around 32,500 square metres.
Twenty-eight international retailers – excluding luxury brands and big box users such as Ikea and Costco – are either actively looking for sites to set up shop in Australia or already in the process of rolling out stores locally, the report found.
Nearly 40 per cent were from the US, with retailers such as Banana Republic, Abercrombie & Fitch, Forever 21 and J.Crew currently looking for space. UK retailers (22 per cent) and Canadian retailers (13 per cent) also dominated the overseas invasion, along with Sweden and Japan (6 per cent each).
The report revealed the influx is predominantly coming from the fast fashion and general apparel sectors, reflecting Australian consumers’ appetite for on-trend, disposable fashion.
Colliers International Head of Retail, Michael Bate, said Australia’s strong economy was attracting many overseas retailers.
“Domestic growth prospects have stalled for many retailers in North America and Europe and in comparison to these countries Australia’s fundamentals are strong,” he said.
He added the successful roll-out of stores in Asia made it more viable for British, American and European retailers to now move into the Australian market and that heavy online traffic from Australia had given retailers the confidence to do so.
“The majority of this influx is on the back of the successful integration that most of the international retailers have had through Asia and China,” he said. “Once they get their network of stores running through Asia … it’s very easy then to just bolt on the Australian stores.”
But he said the rush of international entrants would provide “major challenges” to domestic retailers.
“International retailers have a number of potential competitive advantages over local retailers – for instance, operating globally provides them economies of scale which can be used to bring products to Australia at reduced prices.
“It may be the smaller, local fashion retailers that will bear the brunt of this competition, with their turnover and market share at risk,” he said.
Consumers and shopping centre developers will be the big winners.
“For shopping centre owners, the expectation is that having global brands in their centres will boost foot traffic, sales and consequently leasing demand across the entire centre.”
Development manager Mark Pheely, of the GPT Group – the co-owner and developer of Highpoint – agrees that securing big name internationals is now integral to the success of a shopping centre.
Highpoint, which also opened its first David Jones store on Thursday, will be the first shopping centre in Australia to house both Zara and Topshop under the one roof.
“They (the international retailers) form a very integral part of the offer,” Mr Pheely said. “They not only set a really strong pitch and tone for the rest of the centre, they set you apart from your competitors by giving the customers an offer they perhaps can’t get anywhere else. And they also act as a catalyst for attracting other retailers.”
Of the 28 retailers identified in the Colliers report, some were seeking to open their first Australian store – including Swedish retailer H&M which is expected to open flagship stores in Sydney and Melbourne later this year. Others include Japanese retailer Uniqlo, which will open at Melbourne’s new Emporium in Lonsdale Street later this year, and Miss Selfridg, which will open a pop-up store within the Glue Store in Bondi Junction before moving into stand-alone stores. American cosmetics retailer Sephora and UK fashion chain Next are also currently scouring for Australian sites.
Other international retailers are expected to significantly expand their store portfolios. According to the report, Topshop/Topman are looking to establish 15 Australian stores. Gap – which currently has three stores – plans to open 15. Zara and Uniqlo have plans for 20 and 25 respectively.
“These retailers aim to open a minimum of five stores, and the majority are actually looking for 10 stores in the medium term – say, over a period of five years,” Mr Bate said.
Sydney and Melbourne were currently the favoured locations for international retailers – evenly split between high street and shopping centre locations – but with internationals looking to open more stores, they are likely to start looking at other cities across the country.
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