Despite overall revenue decline forecast for Australia’s fashion industry, luxury retailers and online players anticipate to reap rewards from savvy marketing.
Research from IBISWorld shows the Australian fashion industry expects total revenue to slip a further 1.7 per cent in 2013, with total takings falling to $12.2 billion. But the industry expects to grow in the next fight years.
IBISWorld general manager Karen Dobie said things are looking brighter with a growth of 1.1 per cent per annum is anticipated over the next five years to 2017-18.
“While consumer sentiment is currently at its highest level since December 2010 – and 15 per cent higher than last year – many Aussies are continuing to retain a cautious approach to spending. However, over the next 12 months, IBISWorld expects Aussies will adopt a more relaxed attitude to discretionary spending, which will provide a boost to the fashion industry,” she said.
Moreover, while the next twelve months look lacklustre, Dobie said there are still some strong performing sectors, with multichannel retailing and online sales growth propping up high-end brands.
“Well-known luxury fashion retailers have continued to perform well, and seem to be somewhat immune to fluctuating consumer confidence, with domestic favourites Oroton and Sass & Bide posting growth alongside international brands including Louis Vuitton, Gucci and Chanel,” Dobie said.
At the other end of the spectrum, budget fashion retailers have also reported solid results with Target and Kmart both boosting growth in recent years and Kmart sales up an impressive 25 per cent at its 2013 half-yearly results.
According to Dobie, those managing the transition to online retailing – and new e-commerce platforms – are also reaping the rewards with strong growth recorded for British fashion giant ASOS.com’s Australian business, as well as for new player The Iconic.
Meanwhile the mid-market demand has been driven by the entry of international retailers such as Zara and Topshop.
“Consumers are happily adapting to the pricing model and European styles of international brands, which are driven by mid-range value and fast fashion turnarounds. During 2012, Zara’s sales grew by an estimated 17% and, like elsewhere in the retail sector, its online sales were a boon, accounting for 7% of Zara’s recent growth,” Dobie said.
Overall, IBISWorld expects online shopping trends will continue to shape the fashion forecast, bringing in $13 billion over the coming year (6 per cent of total retail sales) and posting exponential growth of around 20% per annum, with fashion representing one of the most significant online shopping segments for both growth and market share.