Aussie shoppers are enjoying more choice than ever as international brands come to our shores and we purchase online in record numbers, but many iconic Australian brands are struggling to keep their doors open in the new market.
Earlier this month fashion retailer Esprit, which has been operating in Australia for over three decades, announced that it would close all its 67 stores in Australia and New Zealand, putting 350 employees out of work.
Dick Smith, Pumpkin Patch, Payless Shoes, and Masters are also recent casualties who have shut up shop in the wake of a period of upheaval in the retail sector.
Earlier this month fashion retailer Esprit, which has been operating in Australia for over three decades, announced that it would close all its 67 stores in Australia
Children’s clothing store Pumpkin Patch shut down last year after failed overseas expansion
Local luxury brand Oroton, a favourite across generations of Australian women, was forced into voluntary administration last year unable to pay its debts after trading for almost 80 years.
Oroton interim chief executive Ross Lane expressed his frustration at the time saying the company ‘made every effort to avoid making this decision.’
Even iconic Australian retail giant Myer is feeling the pinch with sales figures tumbling and its share price falling from $2.50 at the end of 2013 to just 37 cents in May this year.
The fashion sector seems to be particularly hard hit with retailers such as Surfstitch, Marcs, David Lawrence, Herringbone, Rhodes & Becket, the Australian arm of Topshop, and the General Pants owned women’s retailer Metalicus all going into administration or shutting their doors in the last two years.
Local luxury brand Oroton, a favourite across generations of Australian women, was forced into voluntary administration last year unable to pay its debts after trading for almost 80 years
Iconic Australian electronics retailer Dick Smith is just one of dozens of retailers to close
So what is causing the retail bloodbath? Experts have suggested retailers are facing competitive pressures on multiple sides with not only the rise of online shopping but also global brands breaking into the local market.
A prime example of this, financial consultancy firm BT said in a report released earlier this year, was foreign apparel stores Zara, Uniqlo and H&M increasing price pressures on struggling established department store operators Myer and David Jones.
‘This is the perfect storm for specialty retailers, and in particular fashion retailers,’ retail expert Brian Walker told 9Finance.
He said that research has pointed towards ‘pre-purchasing’ as a factor damaging in-store purchases as consumer can look at many different prices for a product on their phone so they are much more discerning in the purchases they make.
Online retail giant Amazon launched in Australia at the end of last year and despite an underwhelming start, the company has been ramping up operations with the launch of Fulfillment by Amazon in February.
This service utilizes huge warehouse facilities owned by Amazon that will pack and ship retailers goods for them, combine this with the expected launch of Amazon Prime later this year and retailers will likely be trying to keep pace with global behemoth.
Much of the problem faced by the likes of Myer and Oroton is arising from the high overheads that come with brick and mortar stores with both chains attempting to renegotiate cheaper rents.
The New Daily reported that in March this year Amazon had 11.4 million websites visits with Kmart at 7.3 million, and Myer at just 2.85 million.
Even iconic Australian retail giant Myer is feeling the pinch with sales figures tumbling
Masters hardware spectacularly failed in recent years when it tried to take on Bunnings