Zara, H&M and Top Shop the future for New Zealand malls
Tuesday, 4 October 2016
Hot new fashion stores are changing the face of New Zealand retail, signalling a change for the Kiwi mall.
Large crowds attended the opening of H&M's first New Zealand store at Auckland's Sylvia Park on Saturday and the same hype is expected on Thursday when Zara opens its doors, and then again next month, when Top Shop opens in Wellington.
These international brands will offer Kiwi shoppers more choice at a time when consumer spending is increasing.
A recent national retail report by Colliers International says a prolonged period of economic prosperity had buoyed consumers to spend more, and retailers kept enticing them with great deals.
**READ MORE:
* Kiws feel wealthier and spending more as property values increase
* H&M opens first store in New Zealand to more than 1000 fashion fans
* Topshop, Zara and H&M - the fashion internationals changing New Zealand's retail landscape
* Zara could set stage for more fashion shops at Sylvia Park
* Zara and H&M appear poised to follow David Jones into Wellington
* Wellington prepares for a November opening for Top Shop**
Stores were streamlining operations, ramping up sales campaigns and, in some cases, rationalising space to meet the changing demand of the new consumer.
Colliers International director of research and consultancy Chris Dibble said once the international stores had New Zealand trading results, they would definitely consider opening other locations.
There was a limited amount of retail property to lease in the most sought after locations and demand for the same tenancies increased a landlord's ability to command more rent, he said.
Although retail rent prices were up significantly in luxury precincts like Queen St in Auckland, they were about half the average price of Sydney, he said.
Global trends were showing changes in the mix of retail in malls and New Zealand was expected to follow suit, he said.
This would see more of a focus on the 'mini-major' retailers such as Zara and H&M rather then stores like Farmers or Countdown.
They were more agile and did not provide the same degree of risk if they decided to move on, he said.
First Retail Group managing director Chris Wilkinson said there was a frenzy of interest in H&M and Zara because consumers had an unabated appetite for new products.
The stores followed the European model that drove consumer confidence around range, brand, value and experience, he said.
They had an incomparable proposition that gave them the margin to sustain high occupancy costs, which traditional retailers would struggle to sustain, he said.
Fashion retailers had dominated the retail frontages of malls because the owners could afford the increasingly expensive space, he said.
'We'll continue to see a trend for larger stores as leases and opportunities for tenancy amalgamation take place. This has been driven by the retailers and mall landlords.'
However, with an increase in big-box and out-of-town shopping, there were less opportunities for malls to secure the big retailers, he said.
Retail on the rise – no turning back
- The rise in new entrants to Wellington and more retailers relocating in the CBD confirmed the dramatic upturn in the market's strength in less than 18 months.
- Auckland's vacancy rates are at near record lows depending on the sector.
- Regional retailers are sticking to the basics of locating in strong catchments.
- A bounce back in investor confidence in Christchurch cemented the sector's new growth path.
- The national outlook for retail trade was challenging but positive.
- Retailers should expect to have higher rents next year. .
(Source: Colliers International's 2016 national retail report.)