Rag trade facing tough times as sales slow and chains struggle

Topshop's Queen St site. Photo/Chris Gorman

Apparel sales have remained flat so far this year, despite Kiwis spending more on retail overall.

Data on electronic card transactions from Statistics New Zealand shows total core retail sales had increased every month this year on the same period last year.

Comparatively, apparel sales only increased in March, April and May.

For the first seven months of the year, the apparel sector rose in spending by 0.58 per cent compared with last year - while total retail spend rose 4.1 per cent.

In August, spending on apparel dropped to its lowest level since February this year.

The data also showed most other sectors rising continuously each month.

New Zealand's population has been growing at an average rate of 2 per cent year-on-year, with apparel sales in the country not keeping pace.

The past few years have been tough in retail, with a number of well-known Australasian retailers coming under pressure, and several going under.

The list encompasses a number of long-running and often previously successful names.

Those that have come under pressure in recent years include shoe retailer Banks Group, high-end clothing retailer David Lawrence which also owns Marcs, shirt and suit tailor Nicholas Jermyn, Valley Girl, Jean Jones, Identity, Wild Pair and former market darling Pumpkin Patch.

Not all have closed down, however the competitive retail environment has taken its toll.

This is only set to increase with the arrival of Amazon in Australia.

Despite huge fanfare when it first launched in New Zealand in 2014, Topshop New Zealand appointed receivers last week in the face of mounting competition.

Top Retail Ltd, the company that operates the license for the British brand in New Zealand, said its Auckland and Wellington stores had been placed in receivership but would operate as usual until a decision was made on the future ownership of the company.

Top Retail's directors said they had run the rule over the business' ability to keep trading in an environment of heightened competition after the Australian Topshop operation was placed into voluntary administration over similar issues.

"It became apparent that the company was unable to continue to trade due to the losses being incurred and the directors therefore requested the secured lender appoint receivers to the company," the receivers said.

The company had signalled plans to add two more stores, one of which was rumoured to be in Christchurch. It had also planned to open an online store this year.