Australian womenswear retail is in a “tight squeeze” with annual growth down 2.5 per cent since the golden years of 2009, according to IbisWorld.
Over the five years through to 2013/14, the sector’s growth is expected to have contracted by 2.5 per cent to $5 billion net revenue.
Country Road, Premier Investments, Specialty Fashion Group, and Sportsgirl owner, Sussan Group, are the largest players.
IbisWorld says subdued demand, increased competition, and online retail are major factors effecting the industry.
The period since financial year 2008/09 has also brought intensified competition from internationals, such as Zara and Topshop.
The report notes the five year period experienced notably low consumer confidence, with this broadly effecting retail in general.
“This trend prevailed throughout much of the five year period, as consumers remained nervous about global economic conditions and financial market instability,” says Lauren Magner, industry analyst, IbisWorld.
Luckily, the last two years has witnessed an uplift, with improved economic conditions expected to increase revenue by 1.3 per cent by 2013-14.
IbisWorld said capital intensity was an issue for the sector, with it estimated that for every dollar spent on capital, more than $8 is spent on wages.
This ratio may only get higher, as retailers look to staff numbers and training to compete with e-commerce and international entrants.
“Many retailers are attempting to differentiate themselves from competitors by offering a superior level of customer service and assistance,” said IbisWorld.
The report found the Australian womenswear retail employs more than 26,000 people and has a total of 4,552 businesses under its umbrella.
It did not appear to include department stores, which have been increasingly competitive in the space.
