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Global Marketing

International Retail Going Way Down Under in Australia

While the Australians may be known for their tourist-friendly charm and engaging landmark attractions, there is one aspect of the world Down Under that hasn't been so open to international visitors – and that's the retail market.

Within the past two years alone, multiple retailers have been forced to shut their doors in the face of plunging sales and revenue on Australian shores. International retailers such as Payless Shoe Source, GAP and Topshop have all been forced to close their Australian brick-and-mortar locations as the continent grapples with the onslaught of online availability from e-commerce giants like Amazon and Alibaba.

Watch the video below explaining what went into British brand Topshop's Australian demise:

Esprit, a fashion apparel line under Esprit Holdings Limited, is the most recent brand to collapse under the tremendous pressure to survive in Australia's harsh retail climate. The breezy, bohemian line of women's clothing would seem an idea match for the country's beachy lifestyle, but it proved to be no match for the existing competition. Esprit will be closing over 60 stores and laying off hundreds of employees.

Esprit CEO Thomas Tang cited the company's continuous struggle over the past few years without any turnaround as the reason for their exit from the Australian market.

“Esprit's operations in Australian and New Zealand have been loss making for some time, despite intensive efforts made by the teams in the past years…” Tang stated.

“In order to strengthen our foundation, the Group intends to withdraw from these markets and this will allow us to concentrate efforts and resources to other markets in Asia.”

Image result for Esprit store closing australia
Esprit is conceding to the pressures of the Australian market and closing all its doors throughout AU and New Zealand.

While the international retail world may be lamenting the seemingly impermeable loss of profit in the Australian market, local citizens and observers aren't as surprised at the global failings of otherwise successful companies. From an insider's perspective, as Sydney Morning Herald contributor and millennial consume Melissa Singer observed, many fashion brands take a condescending tone towards Australian retail, believing that the geographic distance from other major continents allows them to provide the country with much less variety, old stock, and outdated shopping experiences.

Even brands that proudly tout Australia as their home base have taken this seeming sense of disconnect from the rest of the retail world and abused it. Australian beachwear line Billabong was caught stocking Australian stores with year-old designs while saving the latest and greatest for the American market.

In contrast, Spanish fast fashion line Zara has reported solid earnings and saw a 16% increase in revenue in 2017 after renamping its operations strategy and bringing the same on-trend designs to Australian stores as the rest of the world. The opening of the company's online store in March of this year has added to the positive response by local as well who live in the more far-flung reaches of the continent but still value their retail experience as much as the urban citygoers.

So Australian retail players…take note. If you want your stores' profits to go up, don't treat Australia as a place to let experiences slide Down Under.

References:

https://www.smh.com.au/lifestyle/fashion/hey-global-fashion-brands-stop-treating-australian-shoppers-like-fools-20180503-p4zd88.html

http://www.ragtrader.com.au/news/why-esprit-is-leaving-australia

https://www.smh.com.au/business/companies/zara-commits-to-australian-business-as-sales-grow-16-per-cent-20170523-gwb5sg.html