From Debenhams to Topshop: Why a string of successful overseas department stores and big-name brands have come to Australia with high hopes of retail domination - only to FAIL miserably

  • Debenhams in July announced they would shut their only Australian store 
  • The department store joins list of retailers unable to find success in Australia 
  • Fashion retailers face competition from online shopping and saturated market 

A string of major overseas brands have entered the Australian market with high hopes of retail domination, but few have succeeded.

The latest failure is UK department store Debenhams, which in July announced plans to shut their first and only Australian store in early 2020.

Debenhams joins fellow UK fashion outlet Topshop, along with American retailers Forever 21, Espirit, and Gap in failing to win over local consumers. 

UK department store Debenhams in July announced plans to shut their only Australian store in early 2020, after struggling to tap into the local market

UK department store Debenhams in July announced plans to shut their only Australian store in early 2020, after struggling to tap into the local market

DEBENHAMS

Founder and CEO of Retail Doctor Group Brian Walker said Debenhams, which opened the outlet St. Collins Lane Melbourne outlet in 2017, made a 'bold move' by coming to Australia. 

'Debenhams coming into Australia and opening a physical store was a very bold move, a move that we thought wouldn't be particularly successful,' he told Daily Mail Australia. 

'The rationale for that is the world of retail is undergoing rapid transformation. Australian retail is no different.'

Mr Walker said the past couple of years has seen retail stores closing to opening at a ratio of about two to one. 

He cited store saturation and online shopping as two major factors behind the closures. 

'If you look at the US, Canada and the US examples, they are quite over-shopped in terms of square meterage, per person,' Mr Walker said. 

'Certainly the role of online retail shopping is playing a part... The other aspect with online is that it's a massive research tool. 

Today, Melbourne's Debenhams store contains a sad array of empty shelves with products running dry

Today, Melbourne's Debenhams store contains a sad array of empty shelves with products running dry

'Consumers are more informed, they're able to shop from different locations and they're doing that accordingly.'

Mr Walker said department stores have also felt the pressure more dramatically than any other category across the globe.   

'That's a lot to do with, for the reasons I've given, also specialty retail has improved dramatically,' he said. 

'The David Jones and Myers of this world, when they were growing, there was not Sephora, Zara and so forth... they've all taken big chunks out of the classic department store market. 

'Department stores have not been getting a share of the business.'  

Today, Melbourne's Debenhams store contains a sad array of empty shelves with products running dry. 

The department store announced earlier in the year it would go into administration following a $900m loss. 

The Australian franchise of UK fashion store Topshop entered voluntary administration in May 2017 and was forced to close underperforming stores. Pictured: Topshop in Sydney

The Australian franchise of UK fashion store Topshop entered voluntary administration in May 2017 and was forced to close underperforming stores. Pictured: Topshop in Sydney

TOPSHOP 

The Australian franchise of UK fashion store Topshop faced a similar fate when it entered voluntary administration in May 2017 and was forced to close under-performing stores. 

Topshop announced its expansion to Australia in 2011 but now only has one store remaining. Their products have been available on e-retailer The Iconic since October 2017. 

Mr Walker said Topshop 'haven't done well' and suggested it was to do with their 'heartland' being in the UK. 

'Their range of products probably wasn't as deep and impressive as it is back home,' he said. 

'They had domestic issues anyway... They were also a licensed model over here. Interestingly, so too are Debenhams.'  

Mr Walker said the 'general consensus' on Topshop was that their Australian range wasn't as good as what is on offer in the UK.  

'You could go to Topshop or Zara online and get a better product shipped out of the UK and Spain than you could physically in the stores,' he said.

'Australians are pretty tech savvy, they're able to look online, compare the product in the store and pick it off online.' 

Mr Walker said the sheer distance between Australia and the UK can also be a reflection of retail failings.  

'You've got different hemispheres in terms of fashion. There core winter season is in our summer and so forth, that's a big challenge,' he said,

'You've got cultural idiosyncrasies as well.'

Esprit announced in May 2018 they would close all of their Australian stores, after selling clothes down under for more than 30 years

Esprit announced in May 2018 they would close all of their Australian stores, after selling clothes down under for more than 30 years

ESPRIT 

Mr Walker said Esprit had a similar experience with their Australian offer.

The American retailer announced in May 2018 they would close all of their Australian stores, after selling clothes down under for more than 30 years.   

Executive director Thomas Tang said the brand had been unprofitable in Australia and made the 'unfortunate but unavoidable' decision to pull out of the market.

It had 67 outlets across Australia and New Zealand.  

Mr Walker said: 'They were better in their homeland in terms of their offer.' 

'Tyranny of distance... This is the challenge for global retailers coming to our country and yet others do it pretty well.'

US fashion retailer Forever 21 filed for bankruptcy in September this year

US fashion retailer Forever 21 filed for bankruptcy in September this year

FOREVER 21  

US fashion retailer Forever 21 filed for bankruptcy in September this year.  

'We have requested approval to close up to 178 stores across the US,' the company said in an email statement.

'The decisions as to which domestic stores will be closing are ongoing, pending the outcome of continued conversations with landlords.

'We do, however, expect a significant number of these stores will remain open and operate as usual, and we do not expect to exit any major markets in the US.' 

The first Australian Forever 21 opened up in 2014 in Brisbane but the retailer has since shut its three flagship stores across the country. 

After nearly eight years down under, American retailer GAP closed its last Australian store at the beginning of 2018

After nearly eight years down under, American retailer GAP closed its last Australian store at the beginning of 2018 

GAP 

After nearly eight years down under, American retailer GAP closed its last Australian store at the beginning of 2018. 

Oroton Group, who teamed up with GAP in 2013 to launch the other Australian stores, announced they would sever all ties and shut down the six remaining stores. 

SUCCESSES 

Mr Walker suggested it wasn't bad news for all international brands and heaped praise on UNIQLO and Zara.   

'I have to say Zara's done it pretty well,' he said.

'UNIQLO is the standout for me. I travel the world a lot and they're consistent everywhere.'

Mr Walker said UNIQLO had consistency in delivery, high retail standards around visual merchandising and compliance standards and good consistent pricing policy.

He described their approached as 'consistently excellent wherever they are'.   

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