Our take on Australia’s retail landscape

With more international fashion brands arriving on our shores, forward-thinking Australian retailers are adapting and transforming the way they do business by focusing on customer service excellence and the in-store experience.

Taking a lead from UK brand John Lewis, David Jones is introducing smaller format ‘village style’ stores that mean they can cost effectively reach new customers, open new stores in more accessible locations and focus on creating service-focused shopping experiences.

As part of Stockland’s $377 million redevelopment of Green Hills shopping centre, David Jones will showcase its new single-level store format.

Department store chain Harris Scarfe, recently launched a new store at Shellharbour and will be opening in Green Hills, is also putting the focus back on the customer. Simon Burrett, General Manager Marketing Harris Scarfe, believes that as consumers are faced with more choice than ever before, good customer experience is crucial.

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The arrival of international fast fashion brands has been a game changer for the Australian fashion industry. We take a look at how Australian retailers are responding to the challenge of a fast-paced and ever-changing fashion retail environment.

The future of fashion in Australia

The future of fashion in Australia

In conversation with Jeanswest

Tailor made warehousing solutions

New fashion on show in lower Hunter Valley

Flagship H&M opens at Glasshouse

Summer 2015

“Our department stores are ‘right sized’ – not too big, not too small – to build our business around flexibility and responsiveness. We’re able to read the customer mood, the market trends - even the weather - and react with strategies that keep us right in tune with our customers,” he said.

It seems retailers need to position themselves as more than just sellers of merchandise and services but also as providers of experiences that can’t be replicated elsewhere.

Innovation is keyJeanswest has continued to grow through innovation in design, product ranges and bespoke consumer engagement.

Belinda Waller, General Manager Marketing, Jeanswest believes it’s important to continually expand your brand through innovation.

“Jeanswest is famous for our strong heritage in denim, but it’s important for us to continually inspire our customers,” she said.

Overseas, denim innovators such as Chicago-based Civali Jeans and Dutch brand Denham The Jeanmaker have introduced bespoke jeans for denim aficionados.

Localise and winLocalisation is important in the current retail climate and there is a healthy appetite for innovative Australian brands and niche oriented concepts.

While Harris Scarfe invest in staying abreast of global trends, “nothing replaces local knowledge when it comes to being nimble, adaptive and staying relevant,” says Simon.

Fashion spend on the riseWhile Australian shoppers are embracing fast fashion from international retail innovators – we’re also seeing a corresponding lift in the overall fashion spend.

Fashion buyers who buy from one of the five key international brands – H&M, Topshop, Zara, Uniqlo and Forever 21 – spend around 60 per cent more on specialty fashion.

Right now men and women’s clothing represents the bulk of the total speciality fashion market, with sportswear growth +5% year on year and enjoying the largest increase in share at around 0.8% since 2012.

Attila Stanislas, Store Manager at Lorna Jane, Stockland Wetherill Park said with the demand for premium sportswear that is fashionable and functional on the rise, the new store is performing extremely well.

“Activewear is really big at the moment, so it’s not just about wearing your activewear to go to the gym, everyone’s just in it because it’s comfortable,” she said.

The increased competition is an exciting opportunity for Stockland retailers to adapt and better position themselves for continued growth.

In this issue we uncover the latest trends in the Australian fashion industry and investigate how brands are reinventing themselves to stay relevant in a changing environment. We explore the impact of the arrival of new brands to Australia and how retailers are reassessing the store’s role in customer experience.

As the pace of retail continued to accelerate this year, it was pleasing to see that Stockland recorded some of the best specialty sales growth we’ve seen in four years. There’s good news ahead for the Christmas season, with increased consumer confidence likely to boost retail sales.

That confidence is certainly something we saw on show at the opening of H&M’s flagship Sydney store at Glasshouse on Pitt St Mall, on Saturday 31 October. We’re thrilled to welcome H&M to the Stockland portfolio and confident they’ll be a big player in the diverse and captivating future that’s ahead for retail fashion at Stockland.

In December, Stockland’s investment in Western Sydney continue with the unveiling of the final stage of the $228 million redevelopment of Stockland Wetherill Park, which is opening three months ahead of schedule. Around 30 per cent of the new retailers are fashion and accessories retailers, with new brands set to open including Cotton On Mega, Fresh Soul Clothing and Billini. Customers are responding, since the stage one opening in March there have been over four million visitors to the centre.

We are also very pleased that Stockland will deliver a new fashion mecca in the lower Hunter Valley of New South Wales, introducing David Jones to this region.

I hope you enjoy reading about how the fashion retail space is changing and how Stockland is embracing this evolution.

I’d like to take this opportunity to wish all our retailers a happy and safe Christmas and a prosperous New Year. I look forward to working together again next year.

Kind regards,

Tony Tsekouras General Manager – Retail Leasing

Putting the focus on fashion

Continued from front cover

International brand shoppers*

SPEND ON SPECIALTY FASHION COMPARED TO OTHER FASHION SHOPPERS

60% moreYEAR ON YEAR TOTAL FASHION SPEND

17% morePROPORTION OF ONLINE FASHION SPEND

decreasing

TOTAL SPECIALTY FASHION MARKET EST.

$26bnYEAR ON YEAR MARKET

3.1% growth WHICH HAS ACCELERATED

DOMESTIC IN-STORE SPEND

over 80% OF TOTAL SPECIALTY FASHION SPEND

*Source: Quantium NAB data Specialty Fashion Deep Dive for Stockland year to March 2015. No adjustments have been made for the exclusion of cash payments.

5 key international brands that were analysed were Forever 21, H&M, Topshop, Uniqlo & Zara.

02  Stocktake • Summer 2015

Play interview with Lorna Jane Store Manager, Stockland Wetherill Park here.

Q It’s been said that fashion retailers need to adapt, innovate to survive and evolve in this changing marketplace. How is your business differentiating itself?

A Innovation is always at the forefront of our thinking and denim continues to be one of our most exciting areas for innovation. Earlier this year we launched Jeanswest Prima Jeans; beautiful premium Turkish denim designed to ensure the perfect fit, wash and finish.

From the moment we launched this range it was a huge success with customers loving it far beyond our expectations. A second range was launched in August and as of November we have six Prima styles as permanent options within our range.

Q What do you think shoppers are looking for in a fashion brand?

A Customers are definitely looking for brands that they can aspire to while also reflecting their lifestyle.

Confidence and trust is key with consumers demanding great quality at an affordable price. Customers are also expecting transparency from their chosen brands to ensure they are operating ethically when it comes to manufacturing and sourcing.

Q How are you ensuring that your customers are being given new and interesting ways to shop?

A Our in-store experience continues to be of paramount importance to us. We’ve introduced a number of new initiatives to deliver on customer demands.

Our ‘Collect in Store’ service is also gaining momentum with customers purchasing items online then heading in-store to collect. And of course, our eCommerce offering continues to be a successful virtual store.

Q How influential is social media in connecting with and inspiring your customers?

A We’re continually providing new content across our platforms with strong engagement from our followers. The opportunity to partner with fashion and lifestyle influencers or like-minded brands is a great way to extend the reach of our brand to potential new customers. And, it works both ways, our customers also use it to contact us and post about the way they wear their Jeanswest pickups – it provides us with amazing insights into their passion for the brand.

Q Are you adopting new technology to improve the shopping experience?

A We’re always looking for new ways to improve our business. We’ve recently looked into digital signage and whether it could play a role within our larger format stores. We currently have iPads in most stores, which our Team Members use to show customers a wider range of product, ways to wear particular items and to facilitate the ‘Buy online in-store service’.

“Customers are becoming more time poor so the ease and convenience of shopping in-store is more important than ever.”

“Our ‘buy online in-store service’ is particularly popular as it means customers are not limited to the range/sizes in their local store.”

“While we are famous for our strong heritage in denim, it’s important for us to continually inspire and delight our customers.”

Established 43 years ago, Jeanswest has evolved into one of Australia’s favourite fashion and lifestyle brands. With more than 230 stores across Australia and New Zealand, including 14 in the Stockland portfolio, Jeanswest are passionate about innovation in denim and designing fashion that fits everyone.

We talk to Belinda Waller, General Manager Marketing, Jeanswest about the need for innovation in an ever evolving and fast-paced fashion market.

In conversation with JeanswestWith Belinda Waller General Manager Marketing, Jeanswest

03  Stocktake • Summer 2015

Click & Collect adoptionWe are seeing increasing numbers of overseas retailers adopting Click & Collect. In the UK, over a third of consumers used click & collect services in the year prior, delivering real opportunities for retailers with lower delivery costs as well as the opportunity to engage with customers during their pick up visit. US research suggests that 12% of customers buy other items in-store during collection. (ICSC, 2014).

Customer engagement: Snap Shot SeriesCustomers are excited by brands that are inclusive and collaborative. The Snap Shot Series Competition embodies this in an innovative way. Jeanswest customers share images on Instagram, vote on their favourites and the winning images are designed into a TEE Collection. This year the Collection is 100% Australian made, a first for the brand and launching this month.

A winning t-shirt design

New fashion on show in lower Hunter Valley

Development fast facts

CENTRE SIZE

70,000sqm WITH A NEW CASUAL DINING PRECINCT

A CONTEMPORARY

Entertainment & Lifestyle PrecinctA NEW

David JonesSPECIALTY STORES

Over 225CAR PARKING SPACES

3,100

The new centre, which will more than double in size to 70,000m2, will include a signature David Jones department store showcasing a smaller format on a single level, just one of the inspiring retailers that will see Green Hills become an iconic fashion destination.

In addition to introducing David Jones to the lower Hunter Valley, the expanded centre will include Big W, a cutting-edge format Target, the biggest Dan Murphy’s store in the trade area, a new concept JB Hi-Fi Home store and Harris Scarfe, bringing the total to 225 stores. The centre’s existing mini-majors will be retained and improved including Best & Less, The Reject Shop, Blooms the Chemist and Hot Dollar.

While Stockland Green Hills is already home to Coles and one of the best-performing, full-line Woolworths supermarkets in Australia, the redevelopment will add tempting new fresh food retailers, eight restaurants and a casual dining precinct.

A contemporary entertainment and lifestyle precinct, including a garden courtyard and outdoor pavilion dining area, will help ensure the centre is a vibrant and lively retail destination.

John Schroder, Group Executive and CEO Commercial Property at Stockland said,

Construction will commence in January 2016.

Fashion will be a key offering in the $377 million redevelopment and expansion of Green Hills Shopping Centre in the lower Hunter Valley, which will deliver the most comprehensive retail offer in the area.

“Green Hills was already one of the group’s highest-performing centres, and one of the retail industry’s most productive. This redevelopment will take Green Hills from strength to strength to ensure it becomes an absolute powerhouse within the regional economy.”

“David Jones is proudly on a mission to bring world class, premium retail to Australia. Our new store at Stockland Green Hills will showcase our considerable investment, not only in the look and feel of our store, but in training local full-time and part-time customer service staff who will be so crucial to our efforts to win customers in regional Australia.”David Thomas David Jones Chief Operating Officer

For leasing enquiries, please email greenhillsleasing@stockland.com.au or call 02 9035 2080.

04  Stocktake • Summer 2015

Stennett Road, Ingleburn

Tailor made warehousing solutions

Introducing: Tim BeattieRecently appointed General Manager, Retail Development and Design, Tim Beattie, is looking forward to working with stakeholders to create innovative and sustainable retail precincts that are relevant to the trade areas in which they operate.

With over 10 years tenure at Stockland, Tim will be managing a retail development pipeline valued just under $1 billion and leading an experienced development and design team who are passionate about the latest trends and innovation in the industry.

“I’m looking forward to seeing how fashion is shaping new creative and innovative benchmarks in fitout and store design as well as watching the evolution of Click & Collect in the retail space,” said Tim.

Stockland continues to grow its Logistics and Business Parks portfolio to offer distribution warehousing opportunities in strategic metropolitan locations, with new build projects now underway in Oakleigh, VIC and Ingleburn, NSW.

With strong demand for high quality modern facilities, Stockland’s latest acquisition is a 23,000m2 warehouse and distribution centre in the growing industrial precinct of Eastern Creek, NSW.

Our new acquisition complements our large portfolio, which includes offices, business parks, logistics facilities and even an intermodal terminal.

If your business is looking for warehouse space to expand your operations, Stockland can tailor space to fit your needs. We can provide offices or warehousing solutions fashioned to suit all retailers.

To find out how we can deliver your warehousing needs, contact Robert MacKay, National Development Manager on 02 9035 3412 or at robert.mackay@stockland.com.au

Portfolio fast factsNO. OF SITES

25AREA OWNED

1.3 million m2

VALUE OF PORTFOLIO

$1.9bn

Ingleburn NSW 10,000m2 – 28,800m2

Oakleigh VIC From 4,000m2

Port Adelaide SA 7,600m2

Coopers Paddock, Warwick Farm NSW 3,000m2 – 23,000m2

Yatala Distribution Centre QLD From 8,000m2

Development sites

05  Stocktake • Summer 2015

Flagship H&M opens at Glasshouse

John Schroder, CEO Stockland Commercial Property, Hans Andersson Australian Country Manager for H&M and Mark Steinert Managing Director & CEO Stockland at the VIP launch event of the new H&M flagship store on Pitt St Mall.Official opening of the new H&M flagship store on Pitt Street Mall.

Stockland Corporation LtdACN 000 181 733 Head Office Level 25, 133 Castlereagh Street Sydney NSW 2000

Your sayIf there is a topic you’d like to hear about in future editions, or if you have feedback or wish to receive future newsletters via email, please contact us.

Leasing enquiries E leasing@stockland.com.au P 02 9035 2080 W stockland.com.au

Stockland fashions a green future for its centresStockland is committed to improving the environmental performance, sustainable design and operation of its shopping centres.

As part of that commitment, Stockland is the first Australian property company to sign on to use the Green Star Performance Rating tool across its shopping centre portfolio.

Green Star will measure the operational efficiency of 22 Stockland shopping centres across Australia and identify opportunities for improvements. Green Star will assess each shopping centre on nine key performance criteria - energy, water, transport, materials, indoor environment quality, management, land use and ecology, emissions and innovation.

Each centre will be given a Green Star rating, which ranges from 1 star for ‘minimum practice’

to 6 stars representing world leadership in sustainable building operations.

John Schroder Group Executive and CEO Commercial Property, said:

“The decision to take a portfolio approach to the rating is part of Stockland’s ongoing focus on sustainability leadership in Australia.

We continue to work with our retailers and the community to improve the environmental performance of our shopping centres. Green Star accreditation will enhance our ability to look at ways we can improve our management of various types of retail buildings in the future.”

Stockland already has the most Green-Star-rated shopping centres in Australia.

Another example of Stockland’s commitment to environmental performance and sustainable design is the recent installation at Stockland Shellharbour of Australia’s largest single rooftop solar system. The system provides clean, green, renewable energy and will generate 28 per cent of the centre’s daily base building power requirements.

Thousands of eager fashionistas flocked to the opening of H&M’s much-anticipated flagship Sydney store at Stockland’s Glasshouse on Pitt Street Mall on Saturday 31 October.

Following a $30 million redevelopment, Glasshouse on Pitt Street – co-owned by Stockland and Investa - reopened with a buzz as the home of one of H&M’s largest global stores, an impressive three-level retail oasis featuring underwear, apparel and accessories for women, men, babies and children as well as the new home collection.

Stockland Group Executive and CEO Commercial Property, John Schroder is very pleased to welcome H&M to the portfolio,

Stockland celebrated the opening of its flagship Sydney store with an invite-only who’s who of fashion VIP party on Thursday 29 October for over 1,000 guests including the very fashion-forward singer Solange Knowles who entertained the crowd with an exclusive DJ set.

Fast fashion retailers such as H&M are helping to shape a diverse and exciting future for the Australian fashion industry.

With Zara Home opening a flagship store in Glasshouse in time for Christmas, Pitt Street Mall has firmly established itself as one of Sydney’s premier shopping destinations.

“Our redevelopment of Glasshouse is a tailored retail solution to meet the requirements of this international brand. The result has set this asset apart, with the establishment of a flagship H&M store in an outstanding location. We’re just as excited as shoppers to welcome H&M to the heart of the Sydney CBD,” he said.

Play footage from the opening of H&M at Glasshouse here.