Editor's Note: Luxury dollar still kicking and blinging?

If you were going to bow out of the luxury retail market, then the last six months probably would have been the best time to do so.

That’s the way Richard Constanzo, operations manager for Zestland Prime, frames Gianni Versace’s brief hiatus from Australian shopping strips this year. As reported in this issue of Ragtrader – and first broken in our April 9 edition – the management of Versace’s top line label has undergone a change of hands down under. Hence the hiatus.

Managed for 13 years by regional licensee Zestland, which was headed up by John Hii and two silent offshore partners, the new look Zestland Prime will see Hii go it alone. Hii and his team have already reopened a flagship store at the Palazzo Versace Hotel in Queensland, and have turned their backs on wholesale operations altogether.

But what prompted those two partners to baulk in the first place? And why did those stores shut down for six months only to be gradually reopened – not all of them, mind you – from late September?

I was told a series of very stern letters from Versace HQ prevented interested parties from discussing it back in April – and I’m guessing the same rationale applies this time around.

Earlier this year, a terse senior employee at the brand’s Sydney store (which is no longer in operation) did inform me that HQ was unhappy with the way the brand was being positioned here, but again declined to comment any further. Perhaps it was those pesky wholesale accounts?

What is clearly evident, however, is that despite a reported lapse in luxury spending, upmarket players such as Versace are still doing a dance with the Australian market. In fact, the brand has a breathtaking concept store planned for Melbourne’s Crown Casino complex in November. And it’s not alone.

Looking west, the new $130 million Wesley Quarter retail development recently welcomed Burberry and Emporio Armani into its fold, with both opening their first Perth stores there.

Back east, Colonial First State revealed that Prada, Louis Vuitton, Gucci and Chanel had confirmed sites for a luxury precinct in Chadstone. Then of course you have the traditional upmarket retail strips of Collins Street in Melbourne, Castlereagh Street in Sydney and Queen Street in Brisbane.

I spoke recently with a retail development expert who believed the key to this movement was numbers. Having spent the last few years meeting with luxury fashion executives based in Asia, he believes these brands aren’t interested in opening just one store when toying with a fertile market. They have at least a few up their sleeves. Will it pay off? Only time and (my) credit cards will tell.