Perth’s Park Avenue: Luxury brand influx transforming the CBD
November 2023Originally published by Mark Naglazas in WAtoday, 20 November 2023.
Park Avenue. Rodeo Drive. The Champs-Élysées. Orchard Road. Murray Street?
While it doesn’t quite have the ring of the iconic international glamour shopping destinations, central Murray Street soon be boasting a bevy of global luxury brands, becoming a tourist mecca and giving cashed-up locals the chance to unleash their inner Kardashian.
The high-end invasion of Murray Street began in 2019 when the newly completed Raine Square lured Louis Vuitton from King Street, with Tiffany & Co., TAG Heuer and Chanel hot on their stiletto heels.
Christian Dior, Fendi, Gucci, Cartier and Van Cleef & Arpels have in the past 12 months all signed leases with the owners of Murray Street buildings, which are currently in the process of being renovated and refitted to meet the standards expected of these brands.
And, according to a well-placed source within the retail property industry, Celine, Ralph Lauren and Omega are all in advanced negotiations and close to signing, while representatives from Bulgari, Balenciaga and Yves Saint Laurent have visited Perth multiple times in the past six months.
“Within the next 18 months the retail strip on Murray Street between William and King Streets will see a concentration of luxury brands we’ve never seen in Perth. It will put Perth on the same playing field as iconic global shopping destinations,” says my source.
“What is happening in Murray Street is extraordinary,” he continues. “Normally, you get luxury brands all open at once in malls or slowly in cities. This is the first time ever that you get all these brands opening up at once, like in The Dubai Mall, but in historic buildings. All at once there will be a swag of new high-end stores in a heritage precinct.”
My contact believes that Louis Vuitton is ground zero for the luxury goods business. They move into an area and other brands follow to be a part of a high-end hive, which happened when Louis Vuitton moved into Raine Square.
“Louis Vuitton’s sales soared. When those figures got back to LVMH [the Paris-based luxury goods conglomerate] they sent representatives from all their other brands to find space,” says my source as he takes me for a stroll along Murray Street which is currently one large construction zone.”
“The arrival of so many luxury brands is a tremendous vote of confidence in the city. They are all taking ten-year leases, with options that take it out 15 and 20 years. What they are building is for what they see is coming,” he says, barely audible over the sound of jack hammers.
Another plus for Perth is that these high-end businesses love historic buildings, which is why so many are located in heritage areas in places like Paris and New York. They want to soak up the sense of tradition, class and old money.
And because these brands have deep pockets the upgrades to the Federation-era buildings along Murray Street will be first-rate, which is a boon to those who cherish these properties and want to them to be activated (the Chanel make-over on the corner of William and Murray Streets cost over $13 million, according to sources).
This is startling contrast to the historic buildings in the nearby Hay Street Mall which are languishing because the owners are unwilling to sink money into upgrades or, in the sad case of the Piccadilly Theatre, stuck in limbo because the cost of the renovation blew out (typical when doing up old buildings) and the offshore investors don’t see a financial gain in finishing the job.
The quality of these revamps and the full-press luxe experience offered by these stores – Chanel customers are greeted by a beautifully attired young man holding a tray of Perrier for thirsty customers – is one of the reasons why these kinds of stores are booming in Perth.
Figures supplied by the City of Perth reveals that the spend in luxury goods in the CBD is up by 28 per cent in the past 12 months, which mirrors the rest of the world.
“It is the one part of the global retail landscape that has shone in recent years,” says Jim Tsagalis, whose central city-based company Lease Equity is a key player in Perth’s luxury brand influx.
“While online shopping has undermined in-store shopping buy luxury brand is experiential. Customers in these luxury stores expect to be treated more like a guest in a high-end hotel,” he says.
“They love the service and the decor and being treated like someone important. Luxury brands offer that experience and customers eat it up.”
Tsagalis believes that arrival of so many global luxury brands into the Murray Street will bring about the most profound transformation of the retail landscape in memory.
“It will be the most significant change to shopping in the CBD since the opening of Myer in 1994,” Tsagalis tells me.
This explosion in lust for luxury goods in Western Australia matches that of the rest of the world, which experienced a boom during and after the pandemic despite being a period of mass unemployment and economic hardship for millions.
Indeed, the whole country is in the middle of a luxury goods explosion, with global brands fighting for space in the Melbourne and Sydney CBDs and queues outside the likes of Gucci, Louis Vuitton and Chanel.
Analysts believe that this boom in the middle of a bust is because those who can afford luxury goods are traditionally immune from economic downturns and that such goods have now embedded themselves in the pop-cultural consciousness.
“The growth has been staggering,” Starling Retail Advisory Director told the Financial Review. “I am surprised by the rate of growth and I wonder if we can sustain it at these current levels.”
The conditions driving the demand for luxury goods globally, such as the expansion of the middle class and the brands diversifying their range of products, have been amped up by our special circumstances in WA, with a mining industry that seems immune from sputters in the world economy.
“Perth is an affluent city that did not suffer as much as the rest of the world during the lockdown. But nobody was travelling, so a lot of that money was channelled into luxury goods. And it is continuing,” Tsagalis argues.
“And now Gen Zedders are buying luxury goods, so it is not solely the domain of the super rich. Luxury brands have managed to grab hearts and minds. It’s not just about the item itself. It is about buying the connection to the Kardashians or George Clooney.”
While luxury brands will always be restricted to a small segment of the market, the transformation of Murray Street is a boon for the city generally, says Tsagalis.
“It adds another layer to the city,” he says.
“You have the restaurants and the bars, you’ll have the high-end hotels, you’ll have the revamped Carillion and you’ll have Edith Cowan University. It makes the city a more diverse and interesting place that locals and tourists will want to visit and spend time in.”
