hare in the company – to deliver a second earnings downgrade in five months last week, sending the share price of the 78-year-old company to 20-year lows. Lane warned that earnings will plunge 75 per cent for the full year to between $2 and $3 million. A strategic review is now underway to determine the best way forward, but Oroton isn’t the only established Australian brand struggling to draw in upmarket consumers. Myer also recently attributed $1.5 million of its third quarter sales slide to the poor performance of Sass & Bide. While questions have emerged about whether the “recession proof” luxury category may be falling prey to continually weakening consumer fundamentals, investment from other local players and international brands suggests that the luxury retail landscape is shifting rather than shrinking. Nelson Mair, managing director of Luxury Retail Group (LRG), is bullish on the Australian market and has his eyes on a market leading position, telling IRW that sales across LRG’s brands, including Furla, Sneakerboy and Balenciaga – which it is expanding into Australia on behalf of Kering Group – have remained strong over the last eight months. Mair believes Oroton has failed to deliver on the brands consumers want, particularly in relation to GAP, which is closing 165 stores in America. “Oroton had a limited ability to be successful here, distributing a waning brand [Gap],” he said. Opportunities abound Mair and his business partner, Harrold’s co-founder Theo Poulakis, intend to capitalise on the brands modern consumers are demanding, combining market knowledge with insights from international e-commerce imports. Having recently opened Australia’s first Balenciaga boutique, Mair revealed that LRG is currently in discussion with three high profile brands looking to expand into Australia, saying that he expects to bring one into the market before Christmas. He used Gucci as an example of an in-demand brand, saying that he believes the brand’s headline global 48 per cent like-for-like growth in the last six months is even higher in Australia. Furla itself is also doubling down on Australia, having bought back local distribution rights from LRG earlier this year in a bid to tackle Oroton’s share of the accessories market head on. Four more Furla stores are currently in the pipeline, with an initial indicative target of 25 sites. “The Australian market is very important for Furla and crucial in our expansion plan,” Furla’s global CEO Alberto Camerlengo said in April. “We aim to enhance the distribution in this country.” He noted that Furla’s 95 per cent sales growth in 2016 has led to the expectation that Australia will represent five per cent of global revenue this year. Furla’s interest comes as UK based brand Reiss, which operates more than 190 boutiques in 17 countries, ramps up its Aussie plans. Buoyed by the results from initial flagships at Chadstone and St. Collins Lane in Melbourne, it is now opening a 606sqm store in Westfield Bondi Junction in Sydney. Oroton’s strategic review will also likely consider the prospective impact of LVMH’s stable of 70 luxury brands, with the giant currently in the market for more Australian space. Burberry, RM Williams, Breitling and Dior all also upped the size of key Australian flagship stores last year. Australia’s luxury millennials But while Newman’s strategy may now be under review, his investment in a 30 per cent stake of pureplay brand The Daily Edited earlier this year may be a much-needed upside for the company, if recent data is anything to go by. The brand is popular among a growing share of the segment dubbed ‘luxury millennials’ in a report by marketing consultancy Hitwise last week. The research found that online spend on luxury goods by those in the 18-34 bracket has increased 73 per cent in the last 17 months. International brands appear to be the overwhelming favourite though, with Louis Vuitton and Gucci receiving more than 500,000 combined visits from millennials in the past three months. The brands have growth 135 per cent and 119 per cent respectively with Aussie online shoppers in the last year. “It’s very clear that Gucci and Louis Vuitton have effectively transitioned their brand from ‘old world’ to ‘new world’, with digital technologies and e-commerce at the heart of their transformation,” the report said. LVMH, which owns Louis Vuitton, also announced last week that it is launching a comprehensive e-commerce platform in 17 countries later this year, called Sevres 24. The move, led by the company’s new chief digital officer Ian Rogers, will see LVMH join the likes of Yoox, Net-a-Porter, FarFetch and MatchesFashion.com in an ongoing battle for marketshare in the fast-growing luxury ecommerce market. Locally, LRG has also had success with e-commerce, having generated returns from Sneakerboy’s reverse showroom concept. Mair believes e-commerce is “absolutely critical” to luxury players in Australia and globally, saying concerns over exclusivity and different pricing models in various local markets have been overcome. “In the last three to six months luxury brands have, in one blow, reduced prices in Australia to align them with global models, launching online channels,” he said. LVMH is yet to confirm which countries it will launch Sevres 24 in, but other notable luxury brands such as Ralph Lauren, which Oroton was once a key distributor of in Australia, has also indicated its interest in investing more heavily in e-commerce, deciding to close ten per cent of its physical stores in April.