Let me give this post some context. Sydney’s Pitt Street has been (all but) closed for the last two years in order to undergo extensive construction and renovation works as part of the $1.5 billion redevelopment of the precinct. This involves the consolidation of the Imperial Arcade, Centrepoint and Sky Garden under the Westfields banner, the redevelopment of the Mid City Centre, as well as beautification works along the mall itself.
The Mid City Centre will officially open in June. The Westfields shopping precinct is expected to open later this year and into 2012. The mall should look nice by August.
There has been continuous speculation as to which flagship stores will open within the Pitt Street shopping precinct.
There is much buzz about the anticipated opening of the Spanish-owned ZARA. [ZARA has now opened in Sydney] There is also talk about the likes of GAP [GAP has also opened], H&M, UNIQLO, Marks & Spencer and Banana Republic scouting for suitable locations in Sydney for their first shop. (this paragraph updated 20 April 2011)
This leads to the question that many including myself would like answered: Why is it so hard to get brand names to come to Sydney? Why is Sydney so behind the rest of the world?
Let me try and explore some of the reasons why I believe this is the case.
Frankly stating the obvious, Sydney’s seasons are the opposite of Madrid, Stockholm and Tokyo’s. It would be unreasonable to expect that these overseas brands would be delivering for our market fresh new designs based on our seasons. The strategy they would adopt would be to bring the excess winter and summer stock to Australia in time for the change in season here.
Would Sydney’s market accept clothes that were seen in the northern hemisphere half a year ago?
The cost of bringing the clothes down to Australia would be the most considerable factor. Should these costs be high, inevitably the consumer would be the one that loses out. Brands like UNIQLO and H&M operate on a relatively low cost, high affordability marketing strategy. Likewise, ZARA’s clothes are not by any means cheap, so to be further constrained by high import costs would be disastrous.
If I could buy something similar that costs half the price, then why wouldn’t I?
Same clothes all season
The sales strategy for most of these brands is based on a continuous release of clothes throughout the season in order to keep the collection fresh and affordable. An example of this is the UT strategy by UNIQLO whereby cheap (starting from ￥990/AUD12) t-shirts are constantly released. Australia does not have the necessary demand for this to happen. Clothes here hang from the beginning until the end of the season.
Is Sydney fashionable enough so that people buy new season stock immediately, or would the average Sydneysider wait until the sales at the end of the season?
Lack of retail space
The biggest problem is that Sydney lacks retail space. Compare that to Hong Kong, Seoul, Tokyo, New York or London. The result is that Sydney’s retail rental prices are amongst the top ten in the world. High rental costs only mean one thing: higher costs and thus less affordable products.
Would you be willing to travel to the City to shop at an overseas based brand?
Introducing these overseas brands
If I was to choose the top two brands that I would like to see in Sydney, they would be the ones below.