Other brands to join the expanded Westfield Sydney include Moncler, Omega and Canada Goose.
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The top-performing luxury brands in Australia were Louis Vuitton, Richemont and Hermes.
According to CBRE research, clothing and footwear continue to dominate sales, accounting for $4.3 billion, or 69 per cent, of total revenue in 2024. Jewellery and watches have a significant market share at 25 per cent, with a total revenue of $1.5 billion in 2024.
A recent report from global group Bain & Company, Luxury Goods Worldwide Market Study, revealed that a resurgence in tourism and appetite for luxury experiences has led to stable growth, but brands will need to rethink their “value propositions to remain relevant despite growing competition”.
Bain & Company partner Federica Levato said as brands navigated uncertain times, they would need to be agile in making decisions in areas such as expansion policies, and look at their stock management to ensure “efficiency and responsiveness to market demand”.
Retail leasing specialist Zelman Ainsworth, from A-P, said Australia was well-recognised as a developed, mature and growing retail market globally.
The Louis Vuitton store on Collins Street, Melbourne.Credit: Visions of Victoria
Global luxury retailers once considered only Melbourne and Sydney to be the Australian market; today Brisbane, Perth and Adelaide have developed respectable retail landscapes.
“Further, some global retailers now have multiple retail locations in Sydney and Melbourne, and some have even purchased their own retail flagship stores to cement their presence and investment in these markets,” Ainsworth said.
But he said that major global retail groups had been moving away from transactional shops and using their flagship stores to tell the brand story and share their heritage.
“This allows existing and aspirational customers to experience the brand and products with the theatre and romance only retailers know how to do,” he said.
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Jason Orenbuch, CBRE’s director of retail leasing Victoria, said the Melbourne CBD luxury market had shown strength and resilience in the past 24 months, with more flagships opening and fitouts being refreshed along Collins Street’s Paris end.
“Melbourne has also seen the luxury precinct extend into Russell Street with further flagships, such as LVMH’s Loewe and Fred opening in early 2024, and the recent purchase of 145-149 Russell Street by Christian Dior,” Orenbuch said.
Other global retailers to expand in Melbourne include Lecia Camera, Acne, Cos, Breitling Watches, Swatch, Fred, On Cloud, Arc’teryx, Jimmy Choo, Lulu Lemon and Birkenstock.
Although consumers are engaging with brands online, they are also still making purchases in-store. As of April 2024, people aged between 15 and 54 accounted for more than 50 per cent of all high-end spending in Australia.
CBRE’s Sheree Griff said the trend of younger consumers preferring premium products over “fast fashion” was a key driver behind the robust performance of Australia’s luxury retail market in 2023.
“Social media, particularly TikTok and Instagram, has become a significant platform for younger consumers to discover and engage with luxury brands,” Griff said.
“Short-form videos and viral content, often featuring celebrities and influencers, heavily influence purchasing decisions of Millennials and Gen Z who want to align with fashion trends and brand status.”
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