Fast fashion may have taken the slow route to the Australian market, however leading global apparel players are now opening stores locally at breakneck speed. Fuse this with the fortuitous favour currently bestowed on stylish activewear or “sports-luxe”, and globalisation emerges as a two-way street for Australia, as local designers achieve international recognition and the world of fashion seems a little less geographically distant.
Global players shape up Australian arena
While international press and style blogs are out in force assuring the world that the collaboration between New York-based designer Alexander Wang and Swedish fast fashion giant H&M is one of the most highly anticipated events on the 2014 calendar, many fashion-conscious Australian consumers would disagree. Local shoppers have waited with bated breath for the April 2014 opening of H&M’s flagship store in Melbourne, with the brand’s first Sydney store following in mid-October.
Since the April 2011 unveiling of Zara in Australia, the speculated arrival of other major international fast fashion brands has filled countless column inches, with apparel and homewares brands Topshop, Hollister, Pottery Barn, Muji, Thomas Pink, Miss Selfridge, Agent Provocateur, Williams-Sonoma, West Elm, Marimekko, Forever 21, Uniqlo, COS and Brooks Brothers all making their mark with a store-based retail presence in Australia.
Despite high overheads, largely in the form of rental costs and wages, Australia is considered rich pickings for such overseas brands, many of which are dealing with saturated or stagnant home markets. With international brands facing challenging economic conditions in their local markets, Australia has become an attractive retail target for firms seeking opportunities to grow in a stronger economic environment. H&M faces considerable competition in its key European markets, which has taken its toll on performance, particularly in the UK. While increasing sales in comparable units could prove tough for the company, it is currently pursuing a successful international expansion strategy, with 356 new stores in the 2013 financial year.
For any brand considering entering the Australian market, a localised strategy is, however, crucial. Australian consumers have become more demanding and are not just settling for old collections or inventory from the Northern Hemisphere. They are looking for the latest trends and particularly those adapted to the local market. Rather than viewing Australia as a clearing house for excess last-season stock, brands are finding consumers responsive to collections designed exclusively for the Australian market and to global designer collaborations, such as H&M’s performance-meets-fashion collaboration with Alexander Wang.
What about the home advantage?
Through the Alexander Wang x H&M collection and broader sports-luxe trend, Australian consumers finally have a fashion trend that’s not entirely foreign: they have been blithely sporting sneakers, sweaters and track pants for years. Yet now it seems that, with a few flashier designs, they were on-trend all along. Australian consumers are thus comfortable with the new body beautiful aesthetic, as represented by look books of lycra-clad models running up stairs and slam-dunking basketballs; and catwalks filled with athletic yogis sporting fashionable designs whilst striking physically impressive poses. As sport is the lifeblood of the nation, it would seem that Australian consumers are genuinely interested in the performance aspects of these garments, however the casual convenience of not having to get changed for a post-workout coffee or catch-up is a definite perk.
Home-grown success stories such as fashion activewear brand Lorna Jane and Running Bare, and 2XU in performance sportswear, have set the tone for the local sports apparel market. International brands like Lululemon Athletica have found a welcoming market down under, and local spin-offs, such as The Upside, have flourished. Local designers, including Zimmermann and Dion Lee, have embraced the athletic aesthetic, either launching activewear ranges for Net-a-sporter or incorporating sports-luxe inspiration into their catwalk collections. Lululemon, alongside the more traditional sports apparel brand Nike, even held centre stage at Melbourne Spring Fashion Week in September, with dedicated catwalks showcasing their Spring/Summer 14/15 collections, and Running Bare promoting its S/S 14/15 range in a manner more readily associated with high fashion brands.
Indeed, and perhaps the most telling indication for the future direction of sports-luxe as an international trend, was the December 2013 acquisition of 40% of Australian brand 2XU by L Capital Asia, a private equity fund backed by the world’s biggest luxury brand company LVMH Moët Hennessy-Louis Vuitton. 2XU produces both mainstream consumer sportswear and high-performance garments for elite sports performance.
Fashion for the long run
It’s something of a paradox: while the general consensus is that the retail scene in Australia is sluggish, that shoppers are reluctant to spend and that consumer sentiment is near all-time lows, a A$100 price tag for a pair of yoga pants seems to be no impediment to purchase. Perhaps most importantly, the category is still in a fairly nascent stage of development. It is thus likely that fashion collaborations will become a popular marketing strategy for sportswear brands that have not focused on female consumers from the outset.
And as for the impact of the long-awaited arrival of Zara, Topshop, Uniqlo and H&M to Australian shores? It’s likely that in the short- to mid-term this will lead to a greater push towards vertical supply models by domestic bricks-and-mortar retailers and a higher degree of consolidation of the local market.
Consolidation has recently intensified for the retail apparel scene in Australia, as scale emerges as the key strategy to deal with the greater competition emanating from overseas and online. Over the coming years, consolidation will continue not only at a company level amongst established players, but also with independent designers either being acquired by larger groups or partnering with department stores such as Myer and David Jones through exclusivity contracts, which provide them the necessary scale and support to compete in the local market. This is particularly pertinent given the high profile failure of independent ventures of several Australian fashion designers in recent years, such as Lisa Ho, Kirrily Johnston, Ksubi and Bettina Liano.
As for the most recent entrant, it’s enough for H&M just to be present at the moment, but we’re likely to see its local strategy become more closely aligned with its global strategy, and not just in terms of outlet expansion but also in terms of developing innovative collections that highlight the brand’s design expertise in conjunction with fashion superstar collaborations, as well as sustainability initiatives to further leverage the brand.