Log in
Show password
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Dynamic quotes 
  1. Homepage
  2. Equities
  3. Australia
  4. Australian Stock Exchange
  5. OrotonGroup Limited
  6. News
  7. Summary
    ORL   AU000000ORL5


End-of-day quote. End-of-day quote Australian Stock Exchange - 11/27
0.435 AUD   -2.25%
2016OROTONGROUP : 28/10/2016 - Notice of Annual General Meeting
2016OROTONGROUP : 28/10/2016 - Proxy Form for Annual General Meeting
2016OROTONGROUP LIMITED : Ex-dividend day for final dividend
SummaryMost relevantAll NewsAnalyst Reco.Other languagesPress ReleasesOfficial PublicationsSector news

Foreign firms seek retail therapy in Australia

12/16/2012 | 04:46pm EDT
A shopper passes by the Williams-Sonoma store in Broomfield

SYDNEY (Reuters) - The Americans are coming. And the Japanese and Europeans.

Australia is being invaded by a swathe of foreign retailers, piling pressure on a local industry already battered by weak consumer spending and ruthless internet competition.

U.S. retail giant Williams-Sonoma Inc (>> Williams-Sonoma, Inc.) opens its first owner-operated stores outside of North America in Sydney early next year.

Japan's Uniqlo (>> Fast Retailing Co Ltd) and U.S. youth label Hollister (>> Abercrombie & Fitch Co.) are also scheduled to debut here in 2013, while womenswear store Zara (>> Inditex SA), Britain's youth label Topshop and U.S. lingerie chain Victoria's Secret (>> Limited Brands, Inc.) plan to expand after recent flagship launches. Sweden's fast fashion chain H&M (>> H & M Hennes & Mauritz AB) and makeup brand Sephora, owned by France's LVMH (>> LVMH), are also casting an eye Down Under.

The timing appears incongruous as Australians fret over the tail-off in a decade-long resources boom that made the country's growth a standout among its OECD peers in the wake of the global financial crisis.

Spending has stalled in the A$260 billion retail sector, which accounts for around 18 percent of Australia's economic output, and retailers are jittery about the Christmas season.

But the overseas entrants have their eyes on a longer-term prize in a country that has a relatively high per capita income and home ownership rate, and a love of shopping.

"There's a plethora of retailers looking at Australia at the moment. They see the opportunity, they see that in the future there are great gains to be made and that's why they're setting themselves up now," said Russell Zimmerman, executive director of the Australian Retailers' Association.

Australia is the only developed country that did not fall into recession during the global financial crisis. Australian growth is expected to slow to 3 percent next year from a forecast 3.5 percent this year. That still puts the country ahead of its rich world peers - U.S. growth was pegged at 2 percent and euro-zone growth at just 0.3 percent.

That relative economic strength, along with the high Australian dollar, has spurred demand at foreign retailers' online stores. Saks Inc (>> Saks Inc), Macy's Inc (>> Macy's, Inc.) and Bloomingdales have all opened internet shops targeting Australia in time for Christmas.

But a number of foreign retailers are now focused on the next step - building up a physical presence in a nation where 85 percent of purchasing is still done in shopping malls.


Next up is Williams-Sonoma, the owner of furniture chain Pottery Barn, a brand that Australians recognize through namechecks on TV shows like "Friends."

The company has signed a lease for 2040 square meters of retail space in Sydney to house all four of its brands - Williams-Sonoma, Pottery barn, Pottery Barn Kids and West Elm - the first time the quartet will sit side by side.

While Zimmerman bemoaned the lack of people laden with shopping bags just weeks out from Christmas in Sydney's main retail strip, Pitt Street Mall, Williams-Sonoma isn't concerned.

"We definitely look at it as a long term play," Craig Nomura, senior vice-president of Williams-Sonoma, told Reuters in a telephone interview from San Francisco.

"The performance by country is all relative, so when you compare Australia against the U.K., it's still doing well in the retail world."

Williams-Sonoma was enticed to Australian shores after opening up e-commerce sites in 85 countries just over a year ago. To the company's surprise, it was Australia, with its population of just 23 million, that was the standout revenue generator, beating out larger countries including Britain.

Nomura declined to divulge detailed figures but said the website provided key information on the demand for goods and seasonality factors.

"It's given us a real good insight in terms of product categories that work well for us," he said, explaining that Williams-Sonoma will adapt to seasonality by delaying the delivery of U.S. product for six months.


Other recent entrants, including Topshop and Zara, owned by Spain's Inditex, followed the same path.

"Foreign entrants now are able to do business in countries like Australia without putting a brick on the floor and when they gather that data and they know the market, they're ready to grow," Brian Walker, managing director of consulting firm The Retail Doctor Group, said.

"They have a much better understanding of us than perhaps our local retailers do."

Topshop's first Australian store, in Melbourne, became the brand's best-ever franchise opening after it used data from its international online shop to pinpoint local demand.

"We did a lot of research, we understood what the market is," Hilton Seskin, chairman of Topshop Australia, told Reuters in an interview in the company's flagship store in central Sydney, as shoppers flocked round the pink denim hotpants and sequined shirts.

Seskin said he is planning to open 10 to 15 stores in Australia in the next few years, with two more already confirmed for Melbourne next year.


The entry of foreign competitors, along with their speed bringing products to market and price competitiveness from economies of scale, is an enormous challenge for the local market.

One of the toughest sectors is women's fashion and evidence of the seismic shift is apparent in a large airy warehouse in Sydney's east. Summer sun floods the space from high windows as a team of designers work on the autumn 2013 collection for Specialty Fashion Group's (>> Specialty Fashion Group Ltd.) Autograph label.

The company, which encompasses seven brands, was among the few to quickly grasp that having Zara and Topshop next door, rather than half a world away, was a game-changer.

"These were the retailers who we would go to in Oxford Street in London, or in LA, literally copy their product, go via China, knock it off, come back and bring it to market months later," Specialty Fashion CEO Gary Perlstein told Reuters.

"One, that's illegal; two, if everyone's copying a Zara shirt, there's no point of difference and everyone's just competing on price."

Specialty Fashion now employs nine in-house designers and has an office in Shanghai where the clothes are manufactured. While that's a long way off the 150-plus designers employed by Topshop in London, the changes are pleasing analysts.

Specialty Fashion Group is also the best performer, based on analyst revisions among 67 companies in Australia's consumer discretionary sector tracked by at least three analysts, data from Thomson Reuters StarMine shows.

That contrasts with retail stalwarts Myer Holdings Ltd (>> Myer Holdings Ltd) and David Jones Ltd (>> David Jones Limited), whose belated play for consumers by signing exclusive access deals with overseas brands is being undermined by their direct entry.

Retail Doctor's Walker said the only way forward for Australian retailers was to embrace the revolution.

"They can't have an island mentality. They have to be as prepared to do business in Alaska as they are in Arkansas or Adelaide."

(Reporting By Jane Wardell; Editing by Emily Kaiser)

By Jane Wardell

© Reuters 2012
Stocks mentioned in the article
ChangeLast1st jan.
ABERCROMBIE & FITCH CO. 1.92% 38.55 Delayed Quote.85.76%
BEST INC. 0.70% 2.155 Delayed Quote.4.90%
EURO / AUSTRALIAN DOLLAR (EUR/AUD) 0.50% 1.55816 Delayed Quote.-1.95%
FAST RETAILING CO., LTD. -2.98% 73250 End-of-day quote.-20.79%
HENNES & MAURITZ AB 0.45% 168.84 Delayed Quote.-2.28%
INDITEX -0.57% 31.3 Delayed Quote.20.89%
LVMH MOËT HENNESSY LOUIS VUITTON SE 0.55% 659.7 Real-time Quote.28.42%
MACY'S, INC. -0.78% 26.15 Delayed Quote.134.22%
MYER HOLDINGS LIMITED 0.00% 0.545 End-of-day quote.87.93%
PREMIER INVESTMENTS LIMITED -0.03% 30.93 End-of-day quote.31.56%
PREMIER, INC. -0.35% 39.84 Delayed Quote.13.99%
RALPH LAUREN CORPORATION 1.78% 120.85 Delayed Quote.14.32%
REVOLUTION CO.,LTD. -4.17% 23 End-of-day quote.-28.13%
SEEK LIMITED 0.55% 32.67 End-of-day quote.14.51%
SPACE CO.,LTD. -2.01% 928 End-of-day quote.17.62%
SQUARE, INC. 3.92% 265.25 Delayed Quote.17.33%
TEAM, INC. 4.17% 2.88 Delayed Quote.-74.68%
VICTORIA'S SECRET & CO. 0.50% 55.33 Delayed Quote.0.00%
WILLIAMS-SONOMA, INC. 0.86% 188.05 Delayed Quote.81.94%
2016OROTONGROUP : 28/10/2016 - Notice of Annual General Meeting
2016OROTONGROUP : 28/10/2016 - Proxy Form for Annual General Meeting
2016OROTONGROUP LIMITED : Ex-dividend day for final dividend
2016OROTONGROUP : 22/09/2016 - FY16 Results Announcement
2016OROTONGROUP : 22/09/2016 - FY16 Investor Presentation
2016OROTONGROUP : 22/09/2016 - FY16 Corporate Governance Statement
2016OROTONGROUP : 22/09/2016 - FY16 Appendix 4G
2016OROTONGROUP : 22/09/2016 - FY16 Appendix 4E and Annual Report
2016OROTONGROUP LIMITED : Ex-dividend day for interim dividend
2016OROTONGROUP : 17/03/2016 - OrotonGroup Limited Interim Report
More news
Analyst Recommendations on OROTONGROUP LIMITED
More recommendations
Duration : Period :
OrotonGroup Limited Technical Analysis Chart | MarketScreener
Full-screen chart
Managers and Directors
Ross Boyd Lane Chief Executive Officer & Non-Executive Director
Sophie Holt Creative Director
Sector and Competitors
1st jan.Capi. (M$)
V.F. CORPORATION-13.44%29 028
MONCLER S.P.A.19.15%18 752