Bucking a worldwide trend, Melbourne is bracing for a boom in luxury stores, writes Rachel Wells.
When 23-year-old student Nicola Wood returned from a recent trip to New York with a $3400 Chanel handbag dangling from her arm, her mother was not amused.
"She wasn't too happy about it," laughs Wood, pictured. "But I was always going to buy it. I just adore it. I'd been eyeing it off for years. I had put some money aside for it. I was in New York on holidays. It was cheaper than what I could buy it for at home. So I just got it. And I love it."
Wood, it seems, is like many Australian consumers who are bucking the global trend and continuing to pay a small fortune for luxury handbags and shoes despite the economic climate.
While much has been written about the death of luxury in recent months - the latest forecast from consultancy firm Bain & Company predicts global sales of luxury goods will be down 8 per cent this year - Australia seems to be experiencing something of a luxury boom. According to IBIS world, there are expected to be 4917 luxury goods boutiques in Australia, a 2.8 per cent increase from 2008-9.
Melbourne's luxury retail offering is set to almost double when Chadstone officially opens its new luxury retail precinct on November 18. It will have 12 high-end stores including Chanel, Burberry, Coach, Hugo Boss, Louis Vuitton, Omega, Prada, Ralph Lauren and Tiffany, as well as Miu Miu's first Australian store, and the first stand-alone Jimmy Choo store in Victoria.
Crown is also expanding its luxury fashion offering with a new two-storey Versace outlet to be launched later this month. Versace will join existing luxury tenants Prada, Burberry and Louis Vuitton, the latter of which is also undergoing an expansion. Crown management is expected to announce a handful of new luxury retail tenants in the new year.
And if the foot traffic along the Paris end of Collins Street last week was any indication, then luxury, in Melbourne anyway, is far from dead. At Chanel, a security guard turned me away because they were "too busy at the moment". One woman left the crowded boutique with three Chanel shopping bags swinging from her arm. While other shoppers walked along the luxury strip carrying logo-emblazoned shopping bags from Gucci, Prada, Max Mara and Georg Jensen.
All this bodes well for the Australian heads of the world's leading luxury labels who are pinning their hopes on a resilient Australian economy and a growing luxury market to keep the tills ticking over at their new Melbourne stores.
While luxury sales in the US and Europe are predicted to contract 16 and 10 per cent respectively this year, Asia Pacific, excluding Japan (which is expected to slump 10 per cent), is forecast to grow by 10 per cent, boosted by China, which Bain & Co. predicts will grow by 12 per cent.
Many experts believe Australia's proximity to China will also make it a popular hub for brand-conscious Chinese tourists.
"I think Australia is going to be a very important country for Asian tourism and since our presence in China is very strong, we see a lot of potential from not only China but all over Asia to visit Australia," Italian fashion house Ermenegildo Zegna told The Australian Financial Review in July.
Both Chadstone and Crown are confident the Australian luxury market will only strengthen as the economy continues to recover.
"Our (luxury) stores' figures are actually up on last year," says Ann Peacock, Crown's general manager, public relations. "So it's fair to say that they are all trading exceptionally well . . . The fact that Versace has committed to a brand new store and that Louis Vuitton is undergoing a major redevelopment are great signs of things to come."
Chadstone shopping centre manager Stephen DeWaele says the launch of 12 luxury retailers in a suburban shopping centre, which is a first for many of the luxury brands in Australia, will only expand their customer reach. It is a move many believe is part of a global strategy for luxury brands to target "masstige" customers - aspirational shoppers who are keen on luxury items but without the disposable income to match - with "masstige lines", which offer prestige products at affordable prices. "Certainly the sense is that the shopping centre environment does make it (luxury) a little bit more accessible," DeWaele says. "There are two types of customer. You know there are one-off luxury purchases that people make, whether it's for a 21st, 30th or 40th birthday, or someone who has saved up to buy that one piece that's a real aspirational piece for them. At the same time there's absolutely going to be that core luxury customer."
Philip Corne, chief executive of Louis Vuitton Oceania, agrees. "We're opening at Chadstone for two reasons. One, of course, is to be closer to where our existing customers live. And the other opportunity is to introduce the brand to a new customer."
Wood will be among the tens of thousands expected to visit the new luxury precinct when it opens at Chadstone.
"I will definitely go and check it out, though I'm a bit scared of the crowds. I'm not sure quite what to expect," she says.
If current trends are any indication, she can expect a lot of eager shoppers looking for that little piece of luxury.