A retail expert says small businesses have nothing to fear from the arrival of multiple foreign retailers, despite the imminent launch of Victoria’s Secret in Australia.
Gary Perlstein, chief executive of Sydney-based retailer Speciality Fashion Group, recently announced the company is planning to bring the lingerie label to Australia through a partnership with Limited Brands, the parent company of Victoria’s Secret.
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“We are developing a very close relationship with [Limited Brands] so hopefully we can be their licensee here for all their brands… It’s very exciting,” Perlstein said.
Limited Brands also owns sleepwear brand Pink, personal care line CO Bigelow, accessory label Henri Bendel, Bath & Body Works and White Barn Candle Co. The company recently took Bath & Body Works to the Middle East.
In August last year, Speciality Fashion signed a 10-year licensing agreement with Limited Brands to operate Canadian lingerie label La Senza in Australia, with Perlstein announcing the company’s intention to open 100 stores over three years.
Meanwhile, Victoria’s Secret has been trading out of Sydney Airport under a licensing agreement with Malaysian-based retailer Valiram Group. The lingerie chain has more than 1000 stores and an annual turnover of more than $US5 billion.
Perlstein is uncertain when the Victoria’s Secret deal will be completed, but said it will be a “coup” for Speciality Fashion Group and for Australian women as Victoria’s Secret is considered one of the world’s most popular lingerie lines.
The label is responsible for the rise of Australian supermodel and Victoria’s Secret “angel” Miranda Kerr, and is best known for its elaborate fashion parades and flagship stores.
The launch of Victoria’s Secret in Australia follows in the footsteps of fellow US label Gap and Spanish retailer Zara, while US brand Banana Republic is considering opening a store in Melbourne.
It’s believed British retailer Topshop, Swedish retailer H&M, and American chain Forever 21 are also sizing up the Australian market and might make an appearance in the next 18 months.
National Retailers Association spokesperson Michael Lonie says international labels typically do well in Australia as they approach the market differently to local retailers.
“Foreign retailers are less inclined to [open multiple stores] and will most likely establish one or two flagship stores,” Lonie says.
Lonie says flagship stores have become a destination in their own right, often featuring large spaces and elaborate interior.
“There’s quite clearly a following already [for international retailers], particularly among the younger generations who have travelled widely,” he says.
Lonie says one of the downfalls of flagship stores is their inability to offer each customer a high level of service due to the size of the store, which is where smaller local retailers should focus their energy.
“If smaller retailers try and go mainstream, they will find it difficult. They should focus instead on meeting a niche market and looking after their clients,” he says.