Some people have an eye for fashion.
Not me. It’s not that I don’t appreciate it, or those who make an effort. It’s just that the world of fashion eludes me.
You don’t have to delve too far into my closet to find clothes that date all the way to the 1980s. Back when the cold war was at its zenith, Bob Hawke was Prime Minister, and Midnight Oil was tearing up the charts.
Perhaps the thing I admire more than the actual fashion, is how designers can keep coming up with something new. Or more to the point, the way they re-invent things that have been around for decades.
It’s a bit like the humble old toothbrush. Just when you think they have run out of ideas, along comes something new.
Swiveling and oscillating heads. Cross-action and anti-bacterial double bristles. They’re all just some of the more recent ‘breakthroughs’ in toothbrush technology.
Luckily, there is still the good old, but slightly unfashionable, all-rounder toothbrush — for those who cannot make head nor tail of it all.
It is all just future trash
I guess, though, that even the most expensive fashions eventually end up in landfills. Lying side-by-side with all those old toothbrushes, and all the other stuff we consume. The steel track of a Caterpillar D9 bulldozer rolling back and forth over them, crunching them ever further into the earth.
Of course, some of the new trends are completely ridiculous. And as I say, not really new.
Take the recent spring racing carnival. There you could see dapper young chaps getting about in expensive suits and shoes. A swathe of Gucci loafers and old English brogues.
But why could we see their ankles?
Because these chaps thought it a good idea to wear shoes without socks. A celebration of the VRC’s decision last year to relax its dress code. What a heated meeting that must have been!
Were these men never teenagers? Maybe they have forgotten that rancid stench from wearing sneakers all day without socks. That uncomfortable feeling that something hideous is brewing — a chemical reaction so strong that it could dissolve the skin on the soles of your feet.
Not to mention the rubbing and chafing…nor the fact that the weather in spring in Melbourne is temperamental at best. After a good dousing of rain, the squelch, squelch, squelch, as they trudge their way home. Maybe they all just toss the shoes away at the end of the day.
My guess is that this trend, like so many others, will not last.
Retailers fighting back
Just like fashion always changes — some might say ‘evolves’ — so too do the way retailers sell fashion.
In days gone by, it was customary for a budding designer to rent an old shop off the side of the high street. A place where they could get a start and make themselves known. If they made it, they could soon move around the corner into more expensive digs.
But it seems that this too may have passed.
Sure, some of it has to do with the strangling grasp of the internet. But there is more to it than that.
It also comes as a result of the biggest property boom in history. As property prices have soared, so too has the rent.
Even in a second-string location, someone starting out will struggle to pay the rent. And for the high-end locations? Forget it.
However, it is not just the up and comers who are choking on the size of the rents. It is also happening at the top end of the fashion world, where some of the biggest players are starting to push back.
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Time for a cut
In their case, it is not so much about being able to afford the rent. It is more a case of no longer accepting landlords’ exorbitant rents.
Last week, we saw Premier Investments Group give notice that it plans to vacate three of its leases in Chapel Street, Melbourne. It noted that it will be the first time in 40 years that it does not have a presence on the street.
Once a destination fashion district, there are now plenty of vacant shops. You will see ‘For lease’ signs up and down the strip.
This comes on top of Premier abandoning the Bourke Street Mall in Melbourne last year.
Over in Richmond, it is a similar tale. Shops once inhabited by boutique designers, stare empty into the busy streets. It is the same story in other fashion strips across the country.
The Sydney Morning Herald reported that Premier’s CEO, Mark McInnes, pushed its Chapel Street landlords for a whopping 70% reduction.
While no landlord would ever likely accept that kind of haircut, it shows how hard the bigger retailers are starting to fight back.
To maintain their expensive rents, mega-malls like Chadstone continually upgrade themselves. They see themselves as a destination point, not just another concrete box full of shops. High-end retailers will continue to pay top dollar for access to all their well-heeled foot traffic.
For some of the smaller REITs, though — those that own some of the smaller and regional centres — we might see some more ‘For lease’ signs if the economy drops down a notch or two.
And those tiny shops?
With the banks putting the screws on developers, my guess is that they will sit idle for quite some time. It is almost impossible for developers to get finance. At the same time, retailers still can’t afford the rent.
Only when their rent (and valuations) come back to Earth, will the next property cycle get under way.
Editor, Options Trader