Here Come the Giants: Who’s coming next?

  • News
  • October 22, 2015
  • Elly Strang
Here Come the Giants: Who’s coming next?

Topshop has arrived in Auckland’s CBD, David Jones is coming to Wellington and H&M is to set up in Auckland’s Sylvia Park.

Auckland CBD’s Britomart will soon be home to Tiffany & Co., while Chanel is also entering the market, though it hasn’t officially announced its arrival yet.

Victoria’s Secret quietly touched down at Auckland International Airport last month, while Zara was briefly stocked in a store on Auckland’s North Shore but pulled out after little less than a week.

Retailers, take note – the giants are here, and they’re coming in droves.

Wilkinson says more are under pressure to follow, as it’s a case of fear of missing out (FOMO).

“We think what’s happening at the moment will create a lot of FOMO and with H&M getting a jump on Zara, that will be driving them to find the right sites and inspiring them,” he says.

Profits aren’t the primary driver behind the giants’ decision to enter our market, Wilkinson says. Instead, it’s about profile.

“New Zealand is a small market in global terms. We’re very aspirational but the reality is we want the retailers more than they want us,” he says.

“They’re coming here because they’re reaching saturation in their other markets - they’ve ticketed all the boxes in Australian states.”

Retailers aren’t the only ones who are feeling the heat from the international arrivals.

Shopping centres are now also under a lot of pressure to do something new and exciting, he says.

This was the case with the recently opened NorthWest shopping centre, as though it’s a beautiful centre, he says consumer comment shows there hasn’t been much excitement around its shop offering.

“Consumers have a yearning for something different at the moment and that’ll be the way to reengage them with bricks and mortar,” Wilkinson says.

He refers to some of First Retail’s projects in the UK, where excitement has been “euphoric” because new retailers have been brought in, as well as local retailers who’ve changed their store format.

“In New Zealand, a good example of stores that are doing that is Barkers – all of its stores have different flavours – and Moochi – which is very unique, as while the stock is the same, each of its stores has a different edge to them,” he says.

Mall owners like Westfield have also been encouraging emerging Australian brands into their UK centres to create points of difference, he says.

It’s not just all about fast fashion, either.

Wilkinson says the ownership structures mean there’s a commonality between big player’s varying brands in different markets.

An example of this is UK fast fashion retailer New Look owning shares in Australian retailer Forever New.

“You find there’s a reason why some of these businesses won’t be coming is because there’s these inter-relationships,” He says.

However, there are exceptions to this rule, like David Jones coming to Wellington.

Its parent company, South African Woolworths Holdings, owns the Country Road fashion group, which operates in New Zealand.

But retailers shouldn’t feel threatened by the giants arriving on New Zealand’s shores, he says.

“What we should be doing is celebrating because its re-engaging people with the bricks and mortar retail offer and it’s opening the wallet,” he says. 

Wilkinson's predictions on...

Who's coming to New Zealand next

Not likely
  • TM Lewin. There had been some predictions that this UK (and now Australian) brand would come to New Zealand as a lot of local people were shopping online. We think that local brands 3 Wise Men and Nicholas Jermyn have covered this market well and there would be little opportunity for them to get a foothold. Similarly, Thomas Pink was another brand mooted - however Working Style have this covered.
  • Aldi. I think it’s going to be a long way off before we see the likes of Aldi here, because they need to have a critical mass and a distribution system. The likes of them coming [and] opening one store doesn’t happen - they’d need to hit the ground running with four to five sites. It’s going to take a while and I don’t know whether the market would sustain them.
  • Pottery Barn, Williams Sonoma and West Elm. These co-owned US businesses have now established in upper-end neighbourhoods in Australia's main states. We would expect to see them consider sites in areas such as Ponsonby or Newmarket, as they favour gentrified areas or hub locations near higher-income suburbs.
Ones to watch
  • Cath Kidston. Understood to be eyeing the Australasian market.
  • Karen Millen. Likely to be more openings after Auckland.
Almost a certainty
  • Zara. Space availability and profile will be their biggest issue. Now Topshop is established and H&M have a launch schedule, the pressure will be increasing internally for them to establish here in New Zealand.
  • H&M expansions. You can’t just put one store in New Zealand because it’s quite hard to run and quite hard to provision for, you really do need a number of stores to make this worthwhile. H&M will be looking for critical mass, it will cost them some money but they’ll look to put more sites in.

Where they'll go 

QueenstownWilkinson says Queenstown is very much on the radar of premium retailers due to the growth there, but the barrier is finding the right site and the right scale of site. However, he says it’s not the type of place to attract a shop like Zara. 

Wellington has a great mixed-use development about to start in Willis St, which mirrors what’s happening in the UK at the moment with destination precincts, Wilkinson says. This could be a drawcard for more international retailers to follow David Jones.

AucklandThere’s an interesting mix of huge spending power from immigrants, Wilkinson says, along with a massive demand for brands. However, he says just because most of the international retailers that have entered New Zealand already have chosen the Auckland market, doesn’t mean its the only place they’ll go. “I think all of these businesses have been round a long time and realise cycles can go up quickly and come down quickly, so they’ll take a long-term view on this,” Wilkinson says. He says expanding out to different cities will be important for the international retailers, as they’ll want achieve critical mass.

What they'll want

 Scale “These retailers are looking for fairly large footprints and New Zealand typically doesn’t have a lot of them available in the high profile areas they want. They aren’t prepared to go into second-rate sites,” Wilkinson says. This is why H&M is going into Sylvia Park, he says, as they couldn’t get that scale of space in Queen St or Newmarket.
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