Luxury retail is defying the odds

“This will also happen in Brisbane as retailers look to take a bigger bite out of the future Olympic city, with additional stores in Queens Wharf Brisbane due to be completed in 2023.”

“Luxury retail continues to perform very well in Australia, with many retailers posting growth well in excess of pre-pandemic levels, with luxury spending set to grow more than 5.42 per cent annually through 2027.”

Dexus has taken the lead in new brands at its 25 Martin Place, formerly the MLC Center, with the opening of exclusive labels, including Valentino, as part of the center’s $170 million transformation.

Valentino Castlereagh, the brand’s first flagship boutique in Southeast Asia, opened in November and the 617 square meter store is a strategic location that represents an important step forward in the brand’s store and network expansion strategy.

The new Valentino store at 25 Martin Place, Sydney, owned by Dexus

The new Valentino store at 25 Martin Place, Sydney, owned by Dexus

Head of Transactions and Development – Retail, Healthcare and Alternatives at Dexus, Amanda Pieriboni, said 25 Martin Place has some of the first luxury retail outlets in Sydney, adding that luxury retail is a “total experience of the district”. .

“It’s an evolving story about breathing new life into Sydney’s luxury core by adding new offerings to the mix,” said Pieriboni.

“The appetite for international brands is still there. What has traditionally driven this luxury retail expansion is the tourism market, particularly international tourists.”

Led by Gennaro Autore, the Graaf Group is behind the Missoni and Brunello Cucinelli labels, which will join Valentino at 25 Martin Place on the corner of Castlereagh Street and King Street, and plans to bring more to the country.

“The goal of luxury brands is to have a physical presence,” he told the industry magazine rag trader. “All luxury brands and customers, the target market loves the traditional shopping experiences.

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“So our goal is to definitely create a suitable location that focuses on the traditional in-store experience, while of course having a digital platform for online sales.”

The Graaf Group is a family-owned group of companies active in real estate, luxury fashion, hospitality, interior and architectural design and media.

“Right now there is minimal availability of websites that are suitable for certain brands,” Autore said rag trader “But we are in constant negotiations. We have other brands emerging in relation to fashion, but we’ve secured brands in another line of business that’s more hospitality-related.”

Colliers director of retail leasing Michael Tuck said the strong demand from luxury brands looking for new Sydney CBD flagships or upgrades to existing store sizes and locations and the longer lease terms of 10 to 15 years secured by these brands , have ensured that the limited vacancy is likely to lead to rent increases for prime assets.”

“Following the completion of 39 Martin Place, 388 George St, 25 Martin Place and 77 Market Street, limited opportunities for new luxury and premium commercial developments in the Sydney CBD will ensure rare multi-year lease opportunities are coveted,” said Tuck

“Melbourne’s CBD is also a busy luxury market due to limited supply, although premium tenants are likely to benefit from the redevelopment of Bourke Street Mall.”

He said the growth of luxury retail Down Under is driving the flight to quality and a two-tiered retail market as assets that offer enhanced consumer experiences in prime positions take the lead in the COVID recovery.

Cushman and Wakefield’s report on the world’s most expensive retail strips says demand for luxury initially fell during the pandemic, in line with other segments of retail. Prominent brands took the opportunity to lay off staff, spending time improving their online experience and strengthening relationships with their customers.

Things have been going quite well for the high-end retail brands, however.

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“Since then, the luxury goods market has made a strong recovery and in many cases some retailers are in a better position than they were before the pandemic. Quarterly sales for the big luxury conglomerates like Hermes, LVMH and Richemont have all risen by over 20 percent since then
Late 2019,” the report says.

Inflationary pressures, which are set to increase in the new year, have so far hardly weighed on the budgets of the wealthy
Australian households. Despite rising energy, food and home prices, affluent shoppers continue to seek out luxury retailers, giving upscale brands a buffer even in the face of economic challenges.

https://www.smh.com.au/business/companies/hey-big-spender-luxury-retail-defies-the-odds-20221206-p5c45u.html?ref=rss&utm_medium=rss&utm_source=rss_business Luxury retail is defying the odds

Brian Lowry

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