Fluorescent colors go in and out of fashion, but they’re always prevalent in the Western Australian capital: “You walk into Perth airport and there’s wall-to-wall hi-vis vests,” said retail consultant Alicia Kemp, referring to the uniforms needed for the industries responsible for much of the city’s wealth, making them a magnet for high-end fashion and jewellery brands.
Mining is “driving the whole market,” said Jim Tsagaris, managing director of commercial leasing company Lease Equity, which handles about 80 percent of property transactions in Perth’s CBD. “It’s fair to say we’re the ‘Houston of the Southern Hemisphere.’ We’re heavily biased towards oil, gas and mining, which means our economy is driven by that.”
Western Australia is a major player in the global oil and mining industries, exporting everything from liquefied natural gas (LNG) and gold to iron ore and rare earth minerals. The mining sector has seen boom and bust cycles in the past but has recently stabilized, injecting new confidence into the Perth market and encouraging the debut of luxury brands and the expansion of existing brands in the city centre, a trend that Tsagaris expects to continue.
Christian Dior is reportedly set to open a two-storey flagship store in the fourth quarter of this year, with Fendi and Cartier said to be joining the next wave of openings.
Previously, the few luxury boutiques that opened in Perth were located along the small but pretty King Street, lined with historic buildings. Over the past five years, luxury stores such as Chanel, Louis Vuitton and Tiffany & Co. have relocated to the Raine Square development around the corner, near Murray Street Mall.
Both are moving to larger premises, a trend Tsagaris said is happening in city centres. Gucci will be the last of the global luxury brands to move into a new store due to open mid-year.
But aside from the obvious, what is driving this boom in the city’s luxury market?
“The most remote city in the world”
For those who have never been to Perth (the city is called Booru in the language of the indigenous Noongar people), it may remain a mystery and require a little explaining.
“This is the most remote city in the world,” Tsagaris says, a claim that’s widely disputed but one that most locals are proud of. A direct flight from Perth to Sydney on the east coast is 2,000 miles (3,290 km), just under the distance from London to Damascus. For locals, flying to the Indonesian resort island of Bali, a popular weekend getaway, is a quicker route than getting to Sydney.
A recent city report predicts Greater Perth’s population will grow from just over two million now to 2.9 million by 2031, and asserts that by 2050 it will overtake Brisbane as Australia’s third-largest city after Sydney and Melbourne.
The new Chanel boutique on Murray Street in Perth, Australia. (Chanel)
And it’s not just population that’s growing: Western Australia (WA), home to Perth, had the highest annual growth rate of any of Australia’s eight states and territories when measured across eight economic indicators, including retail spending and job growth, according to a CommSec report.
From a lifestyle perspective, the city offers an unparalleled environment for those who appreciate long, hot summers, wide open spaces, endless beaches and a culinary scene that celebrates the diverse cultural backgrounds of its inhabitants. The local lifestyle also means that the fashion preferences of some of the city’s residents are decidedly more casual.
“It’s a very laid-back lifestyle,” says Kylie Radford, founder of Perth-based women’s clothing brand Morrison. “It’s on the coast, so you can go from the beach to the shopping centre in your swimsuit. [swimsuit] Wear a sarong and no one will look at you sideways.
But don’t be fooled: in the city’s affluent suburbs, where prestige and luxury are also on display, the “stealth wealth” style also influences wardrobe choices.
“There’s definitely an understated air of wealth,” says Tanya Tindall, general manager of Kairis Jewellery in Western Australia, which specialises in fine pearl jewellery. “When you walk through Claremont, [see that an outfit is] “It’s not as casual as you think. It’s not as obvious, but if you know, you know.”
However, “it is clear that there are wealthy people. [too],” she added.
Highest priority
Perth has traditionally ranked fourth as the gateway city to Australia, and this is true in terms of international brands keen to enter Australia and retail businesses looking to expand.
Tsagaris and Kemp agreed that for most brands, both local and international, the logical order of store openings would be Sydney or Melbourne, then another, and then Brisbane or another city in Queensland third, which would make the logistics on the east coast pretty simple.
Louis Vuitton has moved to a larger store in Perth, Australia. (Louis Vuitton)
But things are changing, especially in the luxury market.
Jeweler Van Cleef & Arpels opened its first store in the city in December – it already has stores in Sydney and Melbourne – and the brand’s Asia Pacific managing director, Hugues de Pins, suggested it might make more sense to open in Perth next, instead of Brisbane.
“Australia is a vast continent and our current boutique system may not be easily accessible to people living in Western Australia,” Mr de Pan said, adding that the brand hopes its new Perth boutique will serve “tourists and locals alike”.
One industry source, who asked not to be named, said contrary to popular perception, Perth’s luxury market is mainly driven by local customers and not by the Asian tourist market that was initially the main driver of the industry.
“Perth has grown a bit. [and] Western Australia has a lot of local wealth [that] “Tourism is no longer the big driver,” he said.
A haven from the economic crisis
Its wealth also makes the state less vulnerable to economic ups and downs, making it attractive to luxury retailers expanding into the Australian market.
“We feel we’re pretty immune to volatility,” said Radford, whose Morrison brand was founded in 2002 and has nine stores in six states across Australia. “Mining has a lot to do with that.”
“There’s a lot of money here and, like anywhere in Australia, there are people who are struggling, but at a national level Western Australia is somewhat protected. [Business] It feels more consistent for us,” she added.
It’s a sentiment that many share.
“There is definitely a bubble that is not affected by the cost of living. [crisis] “The problem hasn’t been solved,” Tindall said. “Aspirational customers are still struggling. A customer who aspires to an entry-level, $1,000 silver piece is a harder sell to them than a customer who wants to buy a $5,000 to $10,000 necklace.”
This bubble is most evident in the city’s western suburbs, what locals call the Golden Triangle: this affluent area includes riverside and seaside suburbs such as Peppermint Grove and Cottesloe, as well as the nearby shopping hub of Claremont, and is also home to two of the country’s richest billionaires, mining magnate Gina Rinehart and Andrew “Twiggy” Forrest.
As a shopping destination, Claremont has a strong presence of Australian designer brands, which Tsagaris points out is lacking in the centre of Perth. Brands such as Camilla, Scanlan Theodore and Camilla & Marc & Zimmerman have invested heavily in the area, creating a retail destination that is on par with or better than its peers in Sydney and Melbourne. Claremont Quarter Shopping Centre is home to many of these brands, as well as national department stores David Jones and beauty specialists such as Mecca. Upscale multi-brand boutiques such as Cult Status, Dilettante and Adam Heath are also nearby.
Adam Heath’s mother-daughter duo, Judy and Angela Barbarie, said the only time sales slowed last year was in July, “when it was like Europe, not just the western suburbs but the whole of Perth”.
“Western Australia is definitely a focus region for us,” said Bridget Veals, general manager, women’s clothing and accessories at David Jones. [and] Claremont is definitely the jewel in the crown when it comes to fashion.”
The next big growth
“I think Perth is going to undergo a massive change in late 2025 or early 2026, the likes of which we’ve never seen before. [department store] “Myer entered the central business district 30 years ago,” Tsagaris said, adding that the CBD historically stretched north-south but is now expanding east-west.
There are two areas to be developed: Elizabeth Quay in the city’s west, which will include a number of office buildings, luxury homes and a hotel, and the Perth City Link development to the east, which will house Edith Cowan University’s new city campus and is due for completion at the end of 2025.
Tsagaris estimates that between these two areas, around 50,000 new people move into the city every day to live, work and study.
Karinyup Shopping Centre, Karinyup, a suburb of Perth, Australia. (Karinyup)
“It will make a real difference to the vibrancy of the first floor. [for retailers including fashion and luxury players]”The hotel industry has also undergone a major transformation in recent years, with many of the world’s largest hotels now located in the city, including COMO, Westin, Ritz-Carlton and QT,” he said, adding: “Hotel inventory has increased exponentially – and it’s at a luxury level, a luxury level.”
Outside the CBD and Claremont, fashion retail is generally focused on historic suburban shopping centres and the occasional destination address, such as the stand-alone Elle boutique in the Golden Triangle suburb of Nedlands.
The most significant development in that context is the renovation of the Karinyup Shopping Centre in the suburb of the same name.
Karinyup reopens in 2021 after a $800 million renovation, doubling its size to 109,000 square meters and becoming one of the city’s most important fashion hubs. Of the 300 stores, more than half are fashion and beauty retailers of all types, from mass market to luxury. It also welcomes five international retailers to the state for the first time, including Michael Kors, Sephora and Under Armour.
Operational challenges and opportunities
Perth also poses some challenges for retailers. Logistically, Tsagaris said they have to take into account Perth’s isolation and remoteness from other Australian capital cities.
From a national perspective, staffing can also be an issue. “You need four or five stores to have an area manager,” Kemp said. “You just can’t do that in Perth. It’s a challenge. How do you motivate staff? It’s hard to manage, it’s hard to hire and fire staff and motivate them. For an Australian brand that’s only operational in Australia, Australia is a pretty difficult place to retail.”
Tindall acknowledges customer service is often better in Sydney and Melbourne – where retail is more seen as a career – but hopes the arrival of the newest luxury brands will “improve” service at all levels for Perth’s established brands.
Tsagaris believes a tight luxury CBD property market is an issue for future growth, while sources say homelessness and other social issues persist in certain parts of the CBD, which could cloud its appeal.
But what’s working to Perth’s advantage is its newfound status as a travel hub: its proximity to Southeast Asia is always an advantage, but its location on the west coast also makes it the only Australian city with direct flights to Europe.
Qantas has been operating direct flights to London for several years, with the UK being the largest group of tourists visiting Western Australia. The airline is launching seasonal direct flights between Perth and Rome in 2022, which will be the first direct flights between Australia and mainland Europe, and is due to launch seasonal direct flights between Paris and Perth in July.
“This Gateway proposal will make a big difference. [to the state’s economy and retail landscape]” Tsagaris said.
Whereas the sheer distance of the competition may have worked against Perth from a national perspective in the past, this change in international perspective may ultimately work in its favour.
“Before, it was a bit ‘them and us’ [mentality with the eastern states]said Burberry.[But] “I don’t think Western Australians feel left out anymore. We can paddle our own canoes now.”
