Interlopers fashion $800m in sales

THE three key fast fashion invaders in Australia – H&M, Zara and Uniqlo – look to have comfortably snared more than $800 million in local sales in the past year.

The success of the retail interlopers, who have all entered Australia this decade, comes amid tough conditions in the retail sector and adds to the pressure facing traditional department stores and apparel brands.

Latest accounts from the Australian arm of Japanese casual wear heavyweight Uniqlo show it has posted its first profit since opening its first local store at the start of 2014 in Melbourne’s Emporium shopping centre .

Its sales have also broken through $200 million.

Uniqlo Australia posted a net profit of $7.57 million for the year to August.

The result was a turnaround from the $5.8 million loss it recorded a year earlier as it rolled out new stores in NSW and Queensland.

The Tokyo-based fashion phenomenon now has 14 stores across Melbourne, Sydney and Brisbane.

Its sales rose 22 per cent to $212 million for the year to August as it benefited from the larger store network.

The most recent update from Swedish fashion titan Hennes & Mauritz, which trades as H&M, showed its Australian arm skimmed two billion krona ($313 million) in sales for the nine months from the start of December 2016 to the end of last August.

Fourth-quarter sales results were not yet available, but the most recent numbers showed it was collecting $100 million from Australian shoppers every three months.

At that pace, H&M would have notched upwards of $400 million in Australian sales last year 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 to November 2016, its most recent local profit and loss statement shows.

Spain’s Zara launched the fast fashion invasion by opening its first store in Sydney in April 2011, promptly followed by a Melbourne store. Its most recent accounts show it cleared $256.3 million in sales and posted a $10.3 million profit for the year to January 2017.

Assuming the three retailers maintained sales during 2017 at the levels in their last published accounts, they would have collected about $880 million from Australian shoppers.

Not all fast fashion imports have found success, with British outfit Topshop and Topman Australia falling into receivership last year.

Rob Freeman, an analyst at investment bank Macquarie, said the big three in fast fashion accounted for about 1.6 per cent of total sales across clothing accessories and department stores during the year to June.

They also accounted for almost 60 per cent of sales growth in the apparel and department store category.

“Given the low price points, we expect continued market share loss and margin pressure (discounting) for the department store, discount department store and speciality apparel sector,” Mr Freeman said in a note to clients.