Overseas giants like Japan’s Uniqlo and Sephora of France and with Amazon plotting its introduction in the nation has finally successfully pressured several top retailers, so the future seems tough. The response from developers is to become a more community-driven service and entertainment area and to redefine the mall from a “shopping” focus. While restaurants and cafes have helped entice shoppers to malls, they are now filling shopping centers, providing some buzz as an eerie quiet fills some local clothing shops. With the enormous global names pouring massive amounts of money into the country, once common clothing chains like David Lawrence, Pumpkin Patch, Herringbone, and Rhodes & Beckett have bitten the dust, while others struggle to reduce prices.
This has included cutting back on bricks and mortar stores with its laminated and engineered timber frames, and steering centre owners towards entertainment, health care, meals and childcare providers. Vicinity and Westfield spin-off Scentre are already redeveloping their arcades as this year have already seen their share prices slip to one or two-year lows. Australia’s largest mall, Chadstone Shopping Centre in Melbourne, is currently the site of the southern hemisphere’s first gigantic amusement park Legoland. The business is also tapping into newer technologies like facial recognition to identify customers through their age and sex and analyse their shopping habits.
Real estate company Cushman & Wakefield’s retail investments head Nick Potter claims that what we’re seeing is the malls beginning to pivot away from commodity-type products towards retailers offering a service that isn’t physical. Shopping centers are the modern village, it is where everybody comes together. These centres are typically found in the centre of cities, they have got strong infrastructure, which offers up the capacity to move with the times. The move is a return to the vision of Victor Gruen, an Austrian-born American who in the 1950s developed the notion of the arcade as a public space akin to the market place of centuries ago, where civic life played a fundamental role. Adding to the change is the development of internet shopping, which offers shoppers the exact choices but with the added bonus of not being subject to products and services sales tax (GST) to get anything under $1000.
Canberra has sought to end the loophole by imposing a 10 percent levy from next July but the reduced margins for online stores such as eBay and ASOS still makes them appealing. Future arrivals like Amazon could alter the fact that online shopping is estimated to make up a bit more than 10 percent of total retail sales. University of Technology Sydney accounting pro David Bond questioned how a big jump in online shopping will influence bricks and mortar? Maybe all shopping centers will undergo intense construction with crane hire services and all simply become cafes. You will probably see it move more towards only products being sold on the internet, versus services, cafes, cinemas, game centers and creches in malls.
An analyst of the cultural character of shopping centers in societies, Lisa Scharoun from the University of Canberra, has seen the changes firsthand, with over half of a regional mall now full of restaurants and cafes. Ms Scharoun said programmers were moving away from hosting consumption-driven shops and were willing to rent space to other users such as libraries and churches. She thinks the mall is evolving back to what it was really intended to be when it was initially conceived. It was supposed to be like an enclosed community area where locals meet under service-appropriate architectural timber trusses – a utopian vision of Victor Gruen.
Meanwhile for other big retailers, in an attempt to save the local arm of the UK fast-fashion retailer, the administrators to the failed Topshop franchise in Australia are closing five of its nine standalone stores. Shops at Highpoint in Melbourne, Chatswood and Miranda shopping centres in NSW, and Perth have closed in the past couple of weeks. However, the closure expected to ship the largest shockwaves throughout the wider retail sector is in Chapel Street, in Melbourne’s South Yarra, which has been fighting for many years against competition from surrounding shopping strips, the CBD and online. Chapel Street was the first Topshop shop to start in Australia, in 2011, after 6 months of construction and drake low loaders parked on the famous high fashion capital of Victoria.
The Australian franchise of Topshop entered to voluntary government in May. Talks to attempt to save the business continue involving its Australian owners and the UK owners of the company, such as Sir Philip Green. The evidence is clear. On Saturday, the Chapel Street shop had “closing soon” and “final reductions” signs on the windows. It’s expected to close within weeks. Myer has a 20 percent stake in the Australian operation and contains Topshop concessions in 17 shops. Fairfax Media has contacted Myer for comment on the future of its position in the organization. Topshop Australia administrators Ferrier Hodgson declined to comment.
One option to save the business could be to transfer possession of the trimmed Down Australian performance to its UK franchisors. Topshop was launched in Australia by a business trading under commercial insurance brokers as Australia, which can be controlled by retail veteran Hilton Seskin. Last month, in an event hosted by the Australia-Israel Chamber of Commerce in Sydney, Mr Seskin allegedly said the Topshop inventory model was doomed to fail in Australia. Mr Seskin said they had absolutely very, very little control over what stock came into the marketplace. Products which were made in Asia were sent to the UK, put through a recycling plant, as you call it, a warehouse facility in the UK, converted from US dollars to British Pounds, then flown out to Australia. So, the model was just broken.
What future retail giants have in Australia still remains to be seen as consumers are still responding to Topshop’s problem and the lowering need for the typical brick and mortar store concept.