Fashion giants hit Sydney
The impending arrival of the two fast fashion giants has industry experts questioning what the impact will be on local retailers as well as other internationals already trading in Australia, such as Zara and Topshop.
While Zara is said to be performing well, it is understood that Topshop and Topman’s Australian sales have been lacklustre, particularly at its Chapel St, Melbourne flagship.
H&M and Forever 21 will both make their Sydney debuts at AMP Capital’s Macquarie Centre in November.
Forever 21 will open its second store in Brisbane’s CBD in December. The store, announced in November last year, will occupy a 1900sqm, two storey tenancy at newly developed CBD hotel, Next Hotel – formerly Lennons Hotel, fronting Queen St Mall.
Pitt St Mall will be Forever 21’s third store when it opens in mid-2015. The retailer confirmed this week it has signed a 10 year lease for a three-storey, 2741sqm site at the Sydney Arcade, Pitt St Mall Sydney Arcade in Investa’s 400 George St building.
Value driven rival, H&M, will join Forever 21, opening a three level, 5000sqm flagship in the mall’s Glasshouse retail complex, expected to open its doors around the same time.
It’s taken both brands almost five years to find the right locations in Sydney, a sign they are serious about the Australian market, but also that they have both been cautious – watching how others, such as Zara (who is generally the first to open in a new market) have been received before taking the plunge themselves.
Doing the maths
A question mark also hangs over what the dual openings will do for pricing in Australia.
The average pricepoint of H&M is around $65, while the average price instore at Forever 21 sits at around $25. Topshop and Zara prices range between $80 and $90.
According to an Inside Retail PREMIUM source, H&M made more than $11 million in the first four weeks of trading at Melbourne’s GPO in April this year, and Uniqlo, which opened at Melbourne’s Emporium, reportedly generated around $13 million in its first six weeks.
Uniqlo will also open at Macquarie centre and Pitt St Mall’s Mid-City Centre later this year.
Back in 2011, Zara turned over between $50 and $55 million in its first year. Topshop, operated by Next Athleisure in Australia, soon followed, but has since been dubbed “the weakest link” compared to its international counterparts.
Alex Alamsyah, senior director of retail leasing at Knight Frank, said the first round battle of the brands was between Zara and Topshop. Now it’s Forever 21 versus H&M.
“In the fashion world, H&M and Forever 21 are rivals in a sense, one surpasses the other in some countries and vice versa.
“It is too soon to say who will win this one, but time will surely tell and teenage shoppers and the general public will have so much choice for fast fashion, making it a very exciting time in retail,” Alamsyah said.
Not all international chains have fared so well in new markets. Beauty and cosmetics giant, Sephora, which will also open in Pitt St Mall in December, closed its doors in Hong Kong less than two years after opening.
The brand claimed the withdrawal was based on a “strategic decision” from its France- based headquarters, however, it’s believed the closure was due to store location and struggle to compete with the strength of the city’s department stores.