Zara Opens to Fanfare in Australia

Spanish fast-fashion giant is among a rash of international midmarket brands heading down under.

Zara’s first Australian unit bowed.

SYDNEY — In scenes reminiscent of the chaos surrounding the release of collaborations between H&M and Lanvin and Target and Stella McCartney, the opening of Australia’s first Zara store brought foot traffic to a halt on Sydney’s Pitt Street Mall as hundreds of shoppers queued to get a taste of the Spanish fast-fashion giant’s first Australian store.

This story first appeared in the April 22, 2011 issue of WWD.  Subscribe Today.

It is the first of three or four Zara boutiques that parent Inditex SA has said it plans to open by the end of the year in Australia. The three-level, 19,700-square-foot Sydney store is located within the new $1.9 billion Westfield Sydney development, stage one of which opened last October.

A Melbourne store is due to open in the Bourke Street Mall in late June.

Selling 300 styles across women’s wear, men’s wear and children’s wear, 85 percent of Zara’s Australian merchandise has been either adapted for or tailored specifically to the Australian market, according to Inditex spokesman Jesús Echevarría.

“We needed to be very sure that the collection was the right one,” said Echevarría, who revealed that seven years after opening in Argentina, just 50 of Zara’s 1,723 stores are located in the Southern Hemisphere. South Africa will join the list by the end of 2011.

Prices of the Australian products range from $16 for a tank, up to $75 for a pair of leopard-print skinny jeans, $126 for a trenchcoat and $255 for a three-quarter-length car coat in coral — one of a number of styles offered in an eye-popping, and rather summery, palette of hot pinks and oranges.

“We’re in a very colorful season, maybe there are some similar garments in the north, but they will be adapted to the southern fabrics” said Echevarría, who added the design team will be keeping a close eye on what sells and what doesn’t.

“Every week you are receiving two lines per week, items that are based on the decisions of three weeks earlier, that the customers took,” said Echevarría. “At the end of the day, it’s how close you are to the customer. It’s more than a commercial claim to say the customer is the most important thing. Here it’s really the engine of everything.”

Zara, whose Australian joint venture partner is Melbourne-based Premier Investments, is among a rash of international midmarket brands heading down under. Recent arrivals, or those soon to be, include Gap, Uniqlo, Banana Republic, Hennes & Mauritz and Victoria’s Secret.

“While the Australian market has always been a bit too small for foreign players to really make an effort to crack into, we’re the only country to dodge the global financial crisis bullet and suddenly we’re a fairly appealing prospect for the next five years at least,” said IBISWorld senior analyst Ed Butler.

With clothing, footwear and personal accessories retailing falling by 2.5 percent in January, according to Australian Bureau of Statistics figures, local retailers have good reason to be nervous of Zara in particular, according to Butler.

“I think Zara could be a catalyst for a bit of a shift in Australia’s clothing retail market in the next few years,” said Butler. “They will be responsible for changing consumers’ behavior just enough to create a problem. It’s such a precariously balanced market at the moment, with so many retail outlets and so many retail brands competing in pretty much the same space. It’s hard to imagine that every single company that’s in the market at the moment will be around in five years’ time. We just don’t buy that many clothes.”