Room for everyone, says Zahra

Paul Zahra, david jonesDepartment stores are able to co-exist with international and fast fashion brands, despite common theory, former David Jones CEO, Paul Zahra, has told Inside Retail PREMIUM.

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“It’s a really interesting theme and also a misconception that gets kicked around that department stores have to compete with those international brands and fast fashion brands,” he said.

“To a certain extent I get that, but they can co- exist, which is what they do around the world.”

Zahra spoke to Inside Retail PREMIUM ahead of the DeLux15 luxury forum in Sydney, where he spoke about his career, why he stayed in retail, current trends, and trends going forward.

He said that while new international players create competition, their arrival also has positives.

“Of course there’s new competition, new competition means they’ll eat into the market, and part of that would mean some loss of marketshare for department stores, but in saying that, it brought traffic into the city, reinvigorated the industry, and the best trading stores (for DJs) are the city locations where those international brands have come in.”

Having served as DJs CEO for four years, he is well placed to comment on trends.

“The customer today is complex because she’s prepared to trade up and down and across brands. We have never really seen that up until the last three to four years.

“You can see these women in the street, they’re wearing a Zara top, a Sephora lipstick, designer jeans, Louis Vuitton shoes, and a Dior handbag with an H&M bracelet, so she’s no longer concerned about crossing boundaries.

“It’s about what looks good and what she wants to invest in and what’s right for her. She’s after a very individual and tailored look, so she would go across and up and down. Some of the best trading days at DJs were actually when Zara opened.”

His advice for retailers at the lower end of the market is to invest in design talent, whether that be across fashion, homewares, or furniture.

“Invest in design talent and quality to have a true point of difference, and those lower end brands will do exceptionally well.”

He cites Cotton On as an example of an Australian retailer with lower price points doing well. “They have a true point of difference −
it’s about quality and pricepoint − and they’ve managed to get the supply chain right so they are getting those prices spot on, and the value equation correct, and they’re doing a great job.

“I think Target will get there with their collaboration with designers, they’re not quite there yet, but they are certainly moving that way, but they are far and few between.

“Australian brands are doing it so tough because they’ve been used to getting on a plane going overseas to the northern hemisphere, taking samples, and replicating them. There’s a real re-design and rethink around the supply chain, but predominantly around the design talent and having that point of difference.”

When it comes to luxury, Zahra says there are also things the global brands could also be doing better.

“You can’t shop online for the luxury brands. The luxury space is going through their own challenges, trying to position themselves in that luxury market with the infiltration of the international markets.

“I went to send my sister for a special birthday a handbag and tried to buy a handbag online from any of the luxury brands, but most of them don’t trade online. It doesn’t make sense to me, it’s their biggest opportunity.

“I think it’s a series of obstacles, but they have to overcome them. Equally, if you want to shop online and click and collect instore, all of those omni-channel options, the luxury space has not taken that part of their business seriously yet.”

This story first appeared in Inside Retail PREMIUM issue 2041. To subscribe, click here.

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