Premier Retail boss Mark McInnes says international clothing giants heading down under will have trouble getting the right products for the Australian market.
With the likes of H&M, Marks and Spencer, Top Shop and UNIQLO either headed to or already set up in Australia, local retailers are facing greater competition.
But Mr McInnes, a former chief executive of David Jones, said international clothing retailers have previously struggled to provide the right products for customers on both sides of the world.
“What we’ve seen to date is these international retailers come into the market, because its a very attractive market, but then failing to deal with the product nuances that are required to be successful,” he said.
“The weather is fundamentally different, you can’t have a buyer in London buying for their home market at the same time buying for Melbourne, NSW and Queensland.
“It’s up to H&M and UNIQLO to show they can actually do it.”
He said the only international clothing retailer to make a successful play in Australia so far had been Zara, but that hasn’t hurt any of Premier’s businesses, which include Portmans and Just Jeans.
A greater threat to local retailers was the ability of foreign based sellers shipping to Australia to avoid GST, Mr McInnes said.
International purchases of less than $1000 are exempt from the GST, a situation the Abbott government is considering changing.
“It’s an unbelievable loophole,” Mr McInnes said.
“When the government talks about not subsidising local industry like the manufacturing industry … they are actually subsidising international online retailers to operate in this country, which is destroying the fabric of the retail industry.”
In addition to Just Jeans and Portmans, Premier’s businesses include sleep wear business Peter Alexander, stationery retailer Smiggle and clothing stores Dotti, Jay jays and Jacqui E.
The company’s parent business, Premier Investments, on Tuesday announced a 12 per cent increase in its half year profit to $52.1 million.
Shares in the company soared, jumping 90 cents, or 11.2 per cent, to $8.95.
The star performers during the half were Peter Alexander and Smiggle, which recorded earnings growth of 23 per cent and 16 per cent respectively, offsetting slower growth in other businesses and weaker sales in Jay Jays.
Premier is also making a major play for the UK market with Smiggle; which has already expanded to Singapore and New Zealand.
It opened its first Smiggle store in the UK February and plans to have as many as 200 stores within five years.
