Sign up to receive the Vogue Business newsletter for the latest luxury news and insights, plus exclusive membership discounts.
Australia, once relegated by international fashion audiences only to the spheres of swim and resortwear, has recently been finding its footing with a more well-rounded offering. These days, on the wishlists of fashionistas worldwide, you’ll find the likes of St Agni, the Byron Bay-born minimalist label; Christopher Esber, known for its deconstructed glamour; and Zimmermann, which has evolved from the beach frocks of its adolescence to a truly global brand.
However, Australia’s fashion brands are having a tough time back home. Nique, run by Nadia Jones (sister of Dior Men’s designer Kim Jones), closed down operations in February 2024, though it continues trading via its website. This was followed by the toppling of Arnsdorf, a Melbourne-based slow fashion label with an ardent fan base, which announced its closure in April. Next, it was the turn of one of the biggest independent labels to come out of Australia: Dion Lee, which had seven stores in Australia and one in the US, fell into administration earlier this year. At the end of August, it was announced that the brand would be liquidated after failing to find a buyer.
In the same week, Sass Bide, a label that boasted a feverish following in the 2010s, announced it would close 10 of its 14 stores and pivot to a primarily online business model.
A report published last month by Deloitte Access Economics showed that Australia’s retail sector has been in a recession, effectively, for the last year and a half. According to the report’s author, David Rumbens, retail spending declined in six of the last seven quarters. “And the numbers only look worse on a per capita basis,” he said upon the report’s release.
Together, these closures and statistics paint a somewhat bleak picture of the Australian fashion market. So, how did 2024 become a kind of annus horribilis for local retailers? And what does the future look like?
The Arnsdorf case
Arnsdorf came into being at the cusp of the 2006 recession, so founder Jade Sarita Arnott had some experience navigating economic tumult. The label built up a core audience who engaged with its slow fashion ethos and focus on natural fibres. From 2016 — after reopening following a five-year hiatus to “recalibrate [its] offering” — all manufacturing was brought in-house to its Melbourne atelier, and Arnott broke with the traditional fashion season cycle. Arnsdorf leaned into made-to-order and cultivated a customised, one-on-one showroom experience for its clientele, which was accompanied by tight, less frequent drops of ready-to-wear. The brand achieved B-Corp status in 2019.
Closing Arnsdorf was a complex decision, Arnott says. She explains that, ultimately, the brand needed investment to support its growth, which wasn’t forthcoming. “It felt like it needed to scale to work long-term, and we needed more resources if we were going to achieve that level,” she says. “We explored acquisition with a partner… but that path didn’t eventuate because of the current economic climate.”
She also felt the pullback in customer spending acutely. Before closing, Arnsdorf was stocked by online Australian boutiques like The Undone and The Iconic, as well as in local department store David Jones. It mostly sold, however, through its own flagship store in Fitzroy, Melbourne. “Wholesale buyers are buying less and more conservatively and customers are generally purchasing fewer items or waiting till things are on sale because of cost of living pressures,” Arnott observes.
Much of this is due to the sluggish economic climate in Australia. Economic growth in 2024 is currently below projected levels, but is expected to “slowly start to recover in the second half of 2024”, according to investment advisory firm Vanguard. Jaana Quaintance-James, CEO of the Australian Fashion Council, has observed this in practice: “Australian customers are hurting, and [are] buying less, so Australian brands need to work harder to be the one they shop with when they do buy.”
“There are many challenges at the moment: the increased cost of doing business, softer demand due to increased cost of living, as well as supply chain complexities and workforce shortages,” she continues. Many brands that Quaintance-James works with have found the period after the pandemic difficult because it’s “unpredictable and hard to plan for”.
While economic uncertainty has affected retailers globally, sustainability consultant Clare Press notes some challenges that are unique to Australia. Australia’s geographical remoteness can be “both a challenge and an opportunity”, she says. “Seasons can be tricky — we’re wearing summer in the European winter — but that’s navigable. Just look at Zimmermann’s success.”
Appearances vs reality
While many Australian brands appear to be doing well online and in terms of international appeal, this isn’t always reflected in financial reality.
Dion Lee was a celebrity-beloved local label and its founder, a respected figure in the industry. The brand was worn in recent years by the likes of Anne Hathaway, Bella and Gigi Hadid and Taylor Swift (at the 2024 Super Bowl). Dion Lee announced that it would enter voluntary administration in May after one of its main investors, Cue Clothing Co, ended its partnership with the house and pulled out its investment to focus, it stated, on its wholly owned labels. Three months later, after administrators failed to find a buyer for the brand, the decision was made to wind it down.
Lauren Di Bartolo, a retail advisor and founder of the Australian Style Institute, says that while social media and celebrity endorsement carries weight among customers, it doesn’t always paint an accurate portrait of a brand’s success. “Perception and reality have rarely seen a greater disparity than they do at present,” she says. “It’s the reason we saw [Swift] wearing Dion Lee and (what felt like) shortly after, we see the brand in trouble. Social following is a key metric, but it’s not enough to sustain a brand.”
PR specialist Robyn Catinella, who works with brands like directional luxury label Common Hours alongside industry darling and 2024’s Andam Grand Prize winner Christopher Esber, says international appeal is crucial for a small market like Australia. There’s “almost a halo effect when Australians see brands doing activations overseas, or partnering with the right international people”, she says.
However, industry observers agree that international success is not a recipe for longevity. “The Australian aesthetic and price point appeals beyond our borders at the moment, and this is exciting to see — but it’s not a sustainable growth strategy [in and of itself],” Di Bartolo says.
A brighter future
Despite present challenges, Quaintance-James is hopeful about a “prosperous future” for Australia’s fashion industry. Party season favourite Rebecca Vallance recently launched a splashy collaboration with Nicky Hilton, which is available to shop internationally on Mytheresa. A year on from its majority stake sale to Advent, which valued the company at $1 billion, Zimmermann has opened stores in Dubai, Monaco, Paris, St Barths and New York’s SoHo, bringing its global bricks-and-mortar total to 48.
According to Press, today’s emerging brands need to focus on direct-to-consumer sales, both online and through in-person experiences — as opposed to relying too heavily on the wholesale market — and should make sure they have an authentic story to tell. Catinella agrees, adding that visual storytelling is more important than ever. “Assets are crucial. You need control over that.”
Can independent Australian labels compete with the increasingly powerful global megabrands? “In my view, they shouldn’t try,” says Press. “Maybe it’s about redefining what success looks like… Making less, but better. The last thing you want to be doing in the current climate is carrying a load of unsold stock. Or debt.”
Perhaps most galvanising is that Arnott, even in the wake of her brand’s closure, is also quietly hopeful about the way the current climate might encourage consumers to turn towards well-made, longer-lasting pieces. “This trend of buying less will serve the environment well,” she says, “especially if people buy less, but better quality items. I’m an optimist at heart, so I would like to believe there is hope for Australian independent retail, with this new shift.”
Comments, questions or feedback? Email us at feedback@voguebusiness.com.
Could Diwali become a new highlight on the global fashion calendar?
Menswear is the star at the Hyères International Festival of Fashion
Could Japanese wrestling become fashion’s new favourite sport?
