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Australian fashion retail is undergoing a major shakeout as mid-market brands struggle, luxury sales decline and shoppers shift loyalties, according to stylists, consultants and insolvency experts.
Australian fashion retail is going through a sweeping shakeout, with mid-market stalwarts closing stores, luxury sales falling and shoppers increasingly unsure where to spend their money, according to stylists, retail consultants and insolvency experts.
Shoppers Uncertain Where To Shop
Caitlin Stewart has been a personal stylist for more than 20 years. Most of her clientele are professional women looking to fill their wardrobe with versatile, polished pieces that work just as well in a boardroom meeting as they do on the weekend with a pair of slick jeans. Lately, she has been hearing many of them say the same thing: I used to know exactly where to shop, but now I do not know where to go.
Stewart says there is a significant group of established professional women who feel caught between very youthful fashion, activewear, generic casual clothing and expensive designer labels. To me, this is a real gap, she says. Shoppers have never had better access to a diverse universe of options across which to spread their attention and their dollars.
At any hour of the day, from bed, on the train or at work, we are buying things from all around the world, according to the latest e-commerce report. Stiff competition has delivered a changing of the guard in our shopping strips as stalwarts pull up stumps, leaving many shoppers adrift. Mosaic Brands and other chains have passed their heyday. Other brands such as Alannah Hill and Gorman have suffered after founders divorced their businesses.
Private Equity Failures And Brand Collapses
Private equity has not always been a saviour either. Seafolly, once Australia's most successful swimwear brand, collapsed soon after COVID struck. It was then rescued by LVMH-backed private equity firm L Catterton, but subsequently sold in 2023 to a private investment group. The brand changed hands again before it was acquired by rival Seafolly in 2024.
Jeanswest, which opened in Perth in 1972 and had nearly 150 stores at one point, was sold to a Hong Kong company in 2020. Strained household budgets have shifted people towards affordable alternatives or splurging on investment pieces. Even the luxury market, usually fairly resilient to economic downturns, has not been immune. Luxury department store Harrolds collapsed in 2024 with debts of more than 16 million dollars.
Luxury Sales Decline Amid Street Cred Rise
Big logo brands Chanel, Tiffany and Co and Giorgio Armani have seen sales decline in Australia as younger, aspirational shoppers find and flaunt street cred by scouring vintage marketplaces, a combined market of 8 million Australian shoppers. Incu has become a destination for younger shoppers. It is a common refrain in the retail industry to hear the middle market is dead, but some industry experts do not think this take is nuanced enough.
Uniqlo has become a wardrobe staple for many shoppers. The generic middle is in trouble, says Stewart. It has become a much harder place to be undifferentiated, says fashion consultant and strategist Elizabeth Formosa. The evolution of Australia's fashion industry is not about old versus new brands, she argues.
It is about brands that have and have not kept up. Formosa points to Zimmermann and Scanlan Theodore as examples of brands that have been around for decades and are still building a global reputation. Fashion businesses, inherently transient and linked to trends, can be remarkably adept at projecting an image of success while masking a very different reality. Revenue, visibility and desirability do not necessarily equal a healthy business, Formosa says.
Fundamentals Essential For Fashion Business Health
You still need the fundamentals underneath it: margin, inventory productivity, cash flow, channel profitability, disciplined buying, effective marketing investment and a clear strategy for profitable growth, she says. With leasing costs, you are committed for a period of time. It is not easy just to turn off that fixed-cost element of retail, particularly when you have opened a lot of stores, says KPMG restructuring and insolvency leader Gayle Dickerson.
Having a brilliant designer at the helm does not necessarily translate to a commercially sound business. You have got to be really, really tight on discipline and spend controls and have that capability, Dickerson says. I think that is harder in some of those smaller fashion businesses. I do generally think that it is really important that you have someone there to challenge the amazing creative-led founder who wants to do all these at once, she says.
While mounting overheads create the financial pressure, Stewart says it is losing sight of your customer that can force a business to buckle. A line from a university lecturer from Stewart's time studying styling in Milan has stuck with her: fashion comes from the streets and from the people. The brands that connect with customers pay attention to how people actually want to dress, and listen to their customers while staying true to their own point of view, she says.
The Australian woman has not lost interest in fashion. She has become less loyal to brands that no longer understand her, and she now has far more places to go when they do not. Department stores around the globe are being forced to rethink their business models while facing greater pressure to reinvest in the store and customer experience.
Department Stores And Retailers Face Scrutiny
Myer is among those under scrutiny, with designers ditching David Jones as observers ask whether Myer is winning the department store war. The financial struggles of once-prevalent youth streetwear retailers General Pants and Glue Store have been existential. General Pants losses are in the tens of millions and it is relying on cash injections to stay afloat, while Glue, which permanently closed its stores and online operation in June, is plotting a comeback under new ownership.
Multi-brand retailers in the middle are absolutely copping it from both sides, says retail consultant Trent Rigby. The only way to win is to own your brands, he says. Marcs, David Lawrence and Sass and Bide are among some labels Myer has collected but struggled to turn around, shutting dozens of underperforming stores at recently acquired mid-range labels Portmans and Jacqui E, where sales are rapidly declining.
Brands that once needed retailers to stock their products are now bypassing bricks and mortar altogether to sell directly to consumers online. Luxury activewear brand Stax has grown quickly by selling directly to shoppers. Since joining Myer, chief executive Olivia Wirth has been vocal about her vision of being a house of brands coveted by younger shoppers, to some early signs of success.
Sales in the women's youth category nearly doubled in the 2026 financial year, with Wirth calling out Topshop, Gap and Lioness as top performers in this category. Lioness, founded in Sydney in 2009, began as an online store and now wholesales to major domestic and international e-commerce platforms. The shift underlines how Australian fashion is being reshaped by changing customer habits, rising costs and the growing power of direct-to-consumer brands.
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smh:This story was compiled and edited by the HeadTopics newsroom and HT AI from the reports above.
Mid-Market Brands Luxury Sales Decline Myer Department Stores Direct-To-Consumer Brands
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