Located on the ‘Golden Mile’ of Lambton Quay in Wellington’s CBD and occupying the site of the former Kirkcaldie & Stains mid-sized department store, David Jones’ arrival has been met with enthusiasm by Kiwis keen to have access to a world-class full-line, full service department store. The move is expected to revitalise the retail industry in Wellington’s prime retail precinct by reigniting retail spending and attracting other major retail names to the country – with Topshop alr
eady announcing a two-level flagship also at Lambton Quay. International fast fashion brands Zara and H&M have also announced their entries into Auckland later this year.
Lambton Quay is currently 98 per cent leased, according to real estate firm, Colliers, who said DJs’ imminent arrival has fuelled competition for grabbing a spot on the Golden Mile of Kiwi retail.
For DJs Wellington, Kiwis can expect the same contemporary, internationally awarded design the department store chain debuted at Eastland, Melbourne last year and more recently featured at its new flagship store at Pacific Fair, Gold Coast to be part of the approximately $20 refurbished flagship.
“We’re dedicated to delivering a world-class department store in Wellington and are confident we will exceed expectations when we open in July,” said David Thomas, COO, David Jones. “Customers can expect an exciting mix of local and international brands in a premium environment with a comprehensive range of services. We are bringing a truly special retail experience to this cosmopolitan city.”
So, where does DJs fit within the New Zealand retail market exactly? David Jones is positioning itself as an upmarket destination – a value proposition previously not offered locally in Wellington. Speaking to Inside Retail Weekly, Greg Hartford, GM public affairs for the Retail NZ, New Zealand’s leading retail association, said the arrival of DJs into Lambton Quay won’t impinge on the retail offering already there, which has a Farmers Trading Company mid-market department store operating at the location.
“There’s absolutely room for both Farmers and David Jones on Lambton Quay,” he said. “It’s likely that the arrival of David Jones will add further vitality to the Lambton Quay shopping precinct, and attract more customers in, who will also visit other stores. We expect all stores will benefit from the arrival of David Jones.”
With a concentrated and relatively high income population, Wellington’s CBD is firmly established as the shopping mecca of the country, so it makes sense for David Jones to launch in Wellington first.
“But I’d expect David Jones will also be looking at opportunities elsewhere – particularly in Auckland,” said Hartford.
Beyond Wellington?
Analysts have suggested that no other urban area in New Zealand other than Wellington and Auckland would have sufficient catchment to justify a full-scale department store. Peter Ryan from Red Communication Australia agrees, but believes that isn’t necessarily a bad thing for David Jones’ value proposition.
“90 per cent of the time when you see a failed retailer, it’s about execution,” Ryan told Inside Retail Weekly. “When you’re talking about international department stores and what we interpret as upmarket department stores, there’s an allure to them, a magnetism to them that needs to be there. And I think often times what happens with these domestic players is they lose sight of that – in New Zealand the number of people who actually have the money to spend in a full line service department store at full margin is small, but it is enough to support a store in Wellington and Auckland.”
In a traditional sense, New Zealand has to date not yet hosted what could be termed an internationally lauded department store. The model adopted has generally been centred around a city by city basis and historically businesses have been family owned, as is the case with the privately owned Farmers department store, owned by the James Pascoe Group.
“They’ve been kind of upmarket discount department stores rather than full line full service department stores in my opinion, so I think David Jones going in means New Zealanders will get a notch above what they’ve been used to,” said Ryan.
David Jones will stock a mixture of international brands, previously unavailable in NZ, in conjunction with a number of local labels.
“We are confident we’ve collated a unique and exciting offering that will delight our New Zealand customers,” said Thomas. “Our brand mix for Wellington incorporates many of the popular brands Wellingtonians know and love, but with a fresh take on breadth of range and format instore, combined with a variety of international brands that are new to Wellington or New Zealand.”
Wellington-born label, Twenty-Seven Names, women’s fashion labels Karen Walker, Kate Sylvester and Saben, and menswear brand, Rodd & Gunn, are all making their David Jones debut in Wellington. The department store will be the first in New Zealand to offer international labels Balenciaga, Alexander McQueen, Valentino, Saint Laurent, Chanel, Raymond Weil, Mimco and Samantha Wills. MAC and Estee Lauder, as well as new brands to Wellington such as Tom Ford, Benefit and Aesop, will also feature.
These brands will appeal to Wellington’s bustling downtown, according to Hartford, who thinks the Wellington demographic appealed to the Woolworths Holdings’ board for a myriad of reasons.
“With a large population of high income workers who love to shop, David Jones is likely to do pretty well,” said Hartford. “Kiwis love to shop, and downtown Wellington is a key shopping destination in New Zealand.
“David Jones will be bringing a new offer to Wellington that is likely to be well received by Wellingtonians. It will be positive for David Jones and surrounding stores alike.”
Overzealous expansion
Based on DJs propensity for store expansion in Australia, many retail industry commentators speculate that Wellington is unlikely to be the sole beneficiary in NZ of an upmarket department store. Bids for department stores in Auckland and Christchurch have also been mooted. However, Ryan cautions that overzealous expansion dilutes the ‘specialty’ aspect of what an upmarket department store provides.
“The problem with modern thinking around department stores is you need to be everywhere,” said Ryan. “Great Britain has a population of 68 million people, Selfridges has four stores and Harrods has two – that is for a population of 68 million people.”
If you’re going to provide an upmarket experience, then provide an upmarket experience, says Ryan.
“The more you expand it, the more you dumb it down, it’s part of all of this crappy 80s thinking that came out of America that we demystify the department store and make it everyday, which kills it,” he said.
The characteristics of great department stores around the world include being situated in large historic buildings within CBD locations, provide deeply immersive experiences and provide a degree of magic, according to Ryan.
“That makes them different to just going into a shopping centre because let’s face it, a shopping centre is a giant department store, so if you want to be something different you’re not going to be everywhere. And you don’t need to be because you’ve got online.”