What can we learn from the arrival of Topshop?

  • Opinion
  • March 24, 2015
  • Paul Keane
What can we learn from the arrival of Topshop?

The opening of Topshop and Topman, in Auckland’s Queen Street, was met with a significant rush of customers. An international store with a worldwide reputation will inevitably create huge consumer interest, particularly in the first few weeks.

To get this store in New Zealand was a real estate coup. It wasn’t a matter of calling the company and asking them if they were interested in space. Instead, an opportunity was developed over several years and it involved several parties.

Karen Walker had sold Topshop products in The Department Store (in Takapuna) since 2010, and has partnered with Barkers and property investor Philip Carter to bring this store to fruition.

We imagine that only when all stakeholders and interested parties were confident, and supply sources determined with arrangements made with the international brand, was the decision made to open a flagship store.

From here, the brand is expected to expand into Wellington and Christchurch.

Will more international brands arrive?

We are not as confident as some that we are about to see a string of international traditional brands arrive here. it’s a big call for any retailer to open in a country of 4.5 million people. The most significant influence for retailers is to have a population base and tourists that generate traffic. Therefore, both domestic and international shoppers will support the new brand.

Oxford Street in London is a real example of pedestrian traffic and exposure. Start walking down Oxford Street at 9am and the stroll is comfortable. By 11am it is congested and it stays like that for the rest of the day.

The Topshop location is at “the other end” of Queen street. Observers would suggest that over time it will be the wrong end.

We suspect that the retail focus will drift towards the waterfront, with the Precinct Properties development and other activities generating traffic flow in that area. Therefore we would expect more major retail brands to create their statements in those locations. 

Where will international brands go?

So where to in the future for new arrivals – if any? Auckland is the dominant city. A retailer thinking of entering the NZ market would only want to be in Auckland, in the first instance. The limitation that they will face however, will be the size of store available and the location.

We expect to see some major LFR retailers want to enter the market here in the next few years. The traditional Auckland city will not be able to accommodate these large format outlets. Therefore we will see the emergence of satellite locations outside of the city centre.

This will be driven by access and parking, all of which must be “easy”. Any suggestion that the days of large carparks and like stores is over has yet to be proven. A cluster of both speciality and large format will continue to evolve.

The realisation is that the city will maintain the high density pedestrian traffic flows but other created retail hubs will have the major offerings with car parking easy. Most people living in Auckland will avoid travelling into the city. They will continue to shop where convenience and parking are paramount.

Paul Keane is a registered property professional and has vast experience in New Zealand’s commercial property industries. He provides retail and property consultancy including development management to many New Zealand property owners, developers and city councils. This article was originally published on RCG's blog.

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