29 Jul 2016

Online retail lags behind as David Jones moves in

8:49 am on 29 July 2016

The opening of Wellington's David Jones department store has been hailed as proof the New Zealand retail sector is alive and well despite competition and high rents.

28072016 Photo: Rebekah Parsons-King. David Jones opens in Wellington, bringing international brands to New Zealand. Many of the big brands are available. Jessica Gomes, David Jones Ambassador and David Jones CEO John Dixon cutting the ribbon.

Photo: RNZ / Rebekah Parsons-King

The first David Jones department store outside Australia opened in the capital yesterday morning after $20 million was invested to replace the old-world charm of Kirkaldie & Stains, a Wellington staple which dated back to 1868.

But the David Jones brand - now owned by Woolworths South Africa along with another Australian chain, Country Road - is older, having been set up in Sydney in 1838.

Greg Harford of Retail New Zealand said the venture would provide local retail firms with a strong competitive challenge, but could also bring more people into town to shop - and local stores could get some flow-on from that.

28072016 Photo: Rebekah Parsons-King. David Jones opens in Wellington, bringing international brands to New Zealand. Many of the big brands are available. Make-up for miles, Tom Ford beauty consultant, Jaymie Speer applys the lastest lippy to client Sasha Liu.

Beauty consultant Jaymie Speer applies the lastest lippy to client Sasha Liu at the David Jones opening. Photo: RNZ / Rebekah Parsons-King

Giant Spanish corporation Zara is opening in Auckland, adding to its total inventory of more than 2000 shops worldwide.

Hallensteins Glasson profits fell 21 percent in its most recent report, due to falling price mark-ups caused by stiff competition but it was still offering investors earnings-per-share of about 10 percent.

Valleygirl and Temt, meanwhile, have been placed into administration after slow sales and stock problems.

But Chelsea Leadbetter, who analyses the retail sector for Forsyth Barr, said the industry overall was in good heart.

"The New Zealand retail industry stats are actually fairly good," she said.

"Most categories are seeing some pretty solid growth. From an individual retail perspective it is all about how they manage their costs, their staffing, efficiencies, how they are buying and I guess whether they are getting things that the consumers want to buy."

She said online shopping had penetrated only 7 percent of the retail market, despite having around 25 years to make its mark.

October's imposition of GST for online goods is expected to have an impact on internet shopping.

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