Imports rack up big sales
THE nation’s three key fast fashion invaders – H&M, Zara and Uniqlo – look to have comfortably snared more than $800 million in local sales last year.
THE nation’s three key fast fashion invaders – H&M, Zara and Uniqlo – look to have comfortably snared more than $800 million in local sales last year.
The growing success of the retail interlopers, who entered Australia less than eight years ago, bucks a tough retail market and adds to the pressure facing the nation’s traditional department stores and apparel brands.
The latest accounts from the local arm of Japanese casual wear giant Uniqlo show it has posted its first profit since opening its maiden local store in Melbourne’s Emporium shopping centre at the start of 2014.
Its sales have also broken through $200 million for the first time.
Uniqlo Australia posted a net profit of $7.57 million for the year ending August, its latest accounts lodged with the corporate regulator show.
The result was a turnaround from the $5.8 million loss it recorded a year earlier as it rolled out new stores in New South Wales and Queensland.
The Tokyo-based fashion phenomenon has 14 stores across Melbourne, Sydney and Brisbane.
Its sales rose 22 per cent to $212 million for the year ending August as it benefited from a larger store network.
The most recent update from Swedish fashion giant H&M shows its local arm skimmed $313 million (Swedish Krona 2 billion) in sales for the nine months from the start of December 2016 to the end of August 2017.
Its fourth-quarter sales results are not yet available but the most recent numbers show it was collecting $100 million from Australian shoppers every three months.
At that pace, H&M would have notched upwards of $400 million in local sales in 2017 even if its performance flatlined over the busy Christmas period.
H&M has been the most aggressive of the new fashion imports, opening 27 stores since launching its first store in Melbourne in April 2014. It posted a $4.2 million profit for the year ending November 2016.
Spain’s Zara launched the fast fashion invasion by opening its first store in Sydney in April 2011.
Its most recent accounts show it cleared $256.3 million in sales and posted a $10.3 million profit for the year ending January 2017.
Assuming the three retailers maintained their last published sales numbers over calendar year 2017, they would have collected about $880 million from local shoppers.
Not all fast fashion imports have found success with UK brand Topshop and Topman falling into receivership.
Macquarie analyst Rob Freeman said the big fast fashion three – Uniqlo, H&M and Zara – accounted for about 1.6 per cent of total sales across clothing accessories and department stores during the 2017 financial year.
They also accounted for close to 60 per cent of sales growth in the apparel and department store category, he said.
“Given the low price points, we expect continued market share loss and margin pressure (discounting) for the department store, discount department store and specialty apparel sector,” Mr Freeman said in a note to clients.