These charts show exactly how ASOS, H&M, Zara and Uniqlo are affecting Australian fashion chains
Has there ever been so collective a squeal as that which was elicited by the announcement of Zara's arrival in Australia? Finally, Aussie shoppers sighed, no more overstuffed baggage on flights home from Europe, no more being behind the ball on fast fashion. And even by the time Zara was already in Sydney, Adelaideans hyped up Zara's impending opening at Burnside Village as if it were the only fast fashion store in the city.
Fast-forward to this month, which saw H&M land in Melbourne to perhaps even more hype, while Uniqlo has been quietly unrolling its Australian expansion for more than a year. Between the three new arrivals and Topshop, which was the first to dip its toes in the Australian market back in 2009, there are few global fashion giants left that haven't taken a bite of the nation's style-conscious culture.
Since introducing free shipping in 2011 and opening an office in Sydney in 2012, ASOS no longer elicits "a-what?" in even the stylishly disconnected households. Even Urban Outfitters, General Pants Co's American doppelgänger, now promotes its shipping to Australia. J. Crew and Forever 21 are perhaps the only major players that don't actively market to Australia - although it could be argued that for the latter retailer, Australia isn't quite the right fit for them. (Forever 21 occupies a space that's already claimed by the Cotton On group, with its extremely low-priced brands Cotton On, Factorie, and the recently acquired Supre.)
Of course, something's got to give.
As a whole, the Australian women's fashion industry is estimated to have shrunk about $5 billion over the past five years. That's a shrinkage of 2.5% over a period of time when the economy actually grew nearly 15%. Smiggle and Peter Alexander are the only consistently profitable pillars left holding up Just Group, which owns Just Jeans, Dotti, Portmans, Jay Jays and Jacqui-E. Last financial year, ARJ Group, which owns Sportsgirl, Sussan and Suzanne Grae, saw revenue fall more than 10% on the previous year. (I couldn't locate information on Forever New's revenues or profits, but if you have any information on the company, I invite you to share in the comments.)
Meanwhile, Zara is seeing profit margins down under well above its global average, at 67%, and is about to open its ninth store in the nation.
Now, I'm no financial analyst, and I certainly don't have access to any more financial information on the Australian fashion industry than anybody else. But these charts speak more than my personal speculation ever could on the impact that the globalisation of fashion is having in Australia. The lines represent exactly what Australian consumers are Googling and when. See those spikes for Uniqlo and H&M? That's around the same times their storefronts arrived in Melbourne. The same goes for Zara and its opening in 2011. (If you're on mobile, you may find it easier to view by clicking here and here.)
With the exception of Country Road, every Australian chain on these charts has seen a gradual decline in consumer interest since 2011. Meanwhile, every international retailer bar Topshop has sky-rocketed.
Will these trends continue this way? One can only surmise that without strategised diversification - a la Cotton On Group and its foray into homewares - there's a miserable future for Australian fast fashion chains.