The Problem
Borders continues to close its doors across Australia
It’s no secret that Australian retailers have had their worst financial year in 50 years. With Borders going under, the Just Group closing 50 stores, high street chains like Country Road reporting losses and David Jones practically crying in the corner, it’s a grim market.
An unstable US economy and a fair amount of local political and economic uncertainty are largely to blame for Australian households reportedly saving at their highest rate (17% of income) for a quarter century. We have the cash, apparently we just don’t want to spend it. Great news for the economy in the long run, but a problem for retailers who haven’t had the time to adjust to this swift downturn.
What the retailers are doing about it
If all your news came in the form of large retailer CEO sound-bites (which, frankly, it sometimes seems), then you’d know what else is to blame: the evil internet, with its plethora of foreign owned online retailers, with their low-cost postage and lack of GST. The solution: add GST to all online purchases, or failing that, shut down Australian access to the internet altogether.
Thankfully, David Jones are attempting to boost sales via other, more tried and tested methods, relying on added variety and the old fashioned cult of celebrity. They’re keen to introduce “freshness and newness” via 60 new brands, including a number of celebrity labels from the likes of Lily Allen, Victoria Beckham and Kim Kardashian (yeah, really).
Maybe DJs have been paying close attention to Spain’s Zara (the latest international retailing giant to open its shiny doors in Australia), whose parent company, Inditex, continues to expand globally and post solid profits.
Zara: affordable, trendy and quickly turned over
Zara’s success may lie in its high turnover of inexpensive, trendy and stylish pieces, which reportedly make it from designer to floor in a matter of weeks.
Mustard’s foolproof solution
All right, you’ve waited long enough, so here it is. Mustard‘s infallible solution to getting the registers ringing. Two words: Kate Middleton. Or maybe that should be Catherine Middleton, or is it Catherine, Duchess of Cambridge now?
Style icon: Catherine, Duchess of Cambridge
Either way, Ms Middleton is the ultimate celebrity endorsement. Gone are the days of Rachel Zoe, with the maxi dresses and bug-eyed sunglasses. It’s all about the world’s most famous new royal.
Even prior to her engagement to Prince William, Kate Middleton was setting trends, selling out everything from riding boots to flared jeans (no easy feat in this skinny-legged day and age).
Kate’s £385 Issa Sapphire wrap dress sold out within 24 hours of appearing in the official engagement photos, while high street replicas also sold well. The same goes for a Burberry trench Kate wore in March, which caused sales to soar for both the original and cheaper versions.
It’s no exaggeration to say that Kate’s wardrobe is full of now sold out pieces. Italian designer Luisa Spagnoli even based the key colour of her entire autumn/winter collection off the back of the extreme popularity of a red suit Kate donned in February.
Kate Middleton: the answer to retail woes
Myer, you’re welcome.
