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Melbourne has turned itself inside out to become a world-class retail mecca and all it wants for Christmas is a million shoppers

Melbourne has turned itself inside out to become a world-class retail mecca and all it wants for Christmas this year is a million shoppers

Trundling down Collins Street on a tram, you could easily miss the Hermes store, tucked discreetly behind a heritage facade at the so-called “Paris end” of the strip. But you would be missing one of Melbourne’s greatest retail success stories because the boutique housing the luxury brand’s signature silk scarves, leather handbags and fragrances is experiencing the highest growth of any Hermes store in the Asia-Pacific region. “It’s phenomenal – it has really surprised even us,” says Hermes Australia managing director Karin Upton Baker. “Often growth can be due to a few specific areas but in Melbourne it’s across all 14 product categories.”

Several doors down from the French finery, Italian brand Bulgari’s store has grown literally, increasing its footprint to six times its previous size with a just-opened 400sqm flagship store. The opulence starts with a facade of Spanish marble, then continues inside with a rain of silver and gold fibre optics cascading from the ceiling. As well as a private room for VIP customers, the store will house complete collections of Bulgari jewellery, watches and accessories for the first time. CEO Francesco Trapani says the new flagship is a response to “consistent and quite remarkable” growth in the local luxury retail sector. “We have witnessed a renewal of energy in the Melbourne market over the past few years,’’ he says.

Trapani’s sentiments are shared by Philip Corne, chief executive of Louis Vuitton, who has spared no expense refurbishing the brand’s existing store on Collins Street. With design features by “starchitect” Peter Marino, who is also credited with Louis Vuitton’s Manhattan flagship and its 15,000sqm complex on Paris’s Champs-Elysees, it’s a response to Melbourne’s seemingly insatiable appetite for luxury.

As with Bulgari, the overhaul at Louis Vuitton will eventually include a VIP room, plus a dedicated watch and jewellery area and broader range of product. “The thing we’ve noticed about Melbourne compared with other cities is that in percentage terms it’s growing faster,” Corne says. A planned renovation of Louis Vuitton’s store at Crown Casino and a new store at Chadstone shopping centre are also aimed at accommodating “the strong customer response we’ve had in the Melbourne market”.

The city is experiencing an unprecedented renaissance of luxury. Big rollers are lining up to splash their cash and secure their status on Collins Street, with no-expense-spared boutiques amid the city’s bankers, medical specialists and top restaurants. Newcomers are Paspaley and Emporio Armani, with Prada (which already has a store at Crown Entertainment Complex) due to open its doors this month. Ralph Lauren renovated in August, and Zegna will overhaul its city boutique in the New Year.

It’s not just fashion and accessories labels making spectacular architectural and financial gestures. The $45 million redevelopment of the Grand Hyatt is finished, and the $60 million transformation of The Rialto building intoan InterContinental Hotel will be completed this week. Spring Street’s grande dame of hospitality, The Windsor Hotel – built in 1883 and predating some of the world’s leading landmark hotels – embarks on two years of refurbishment next autumn. In April, the Hilton Melbourne South Wharf Hotel opens in the “heart of new Melbourne”, between Docklands and Southbank.

Nearby, Crown recently welcomed Nobu to its restaurant world, alongside Sydney institutions Rockpool, Bistro Guillaume and Giuseppe Arnaldo & Sons, and a Gordon Ramsay’s Maze restaurant is scheduled to open in February 2010. In addition to imports, the local scene has spawned many new success stories, among them The Press Club, Teage Ezard’s Gingerboy, Guy Grossi’s Mirka at Tolarno and Shannon Bennett’s Bistro Vue.

What is driving this renaissance of fashion, food and five-star hotels? Melbourne may claim to be the arts and fashion capital of Australia (which it does, and often) but it’s certainly not the financial hub. The shift in commercial banking’s critical mass from Melbourne to Sydney in the past five years has been massive, as has the population and attendant economic growth in Brisbane and Perth compared with other capitals.

The answer to Melbourne’s munificent makeover is a complex one, if there’s one at all. One argument is that the city in general has gone through a rejuvenation in the past two decades, fuelled by campaigns to revive its economy by the Kennett and Bracks governments. The increased cultural and retail activity has finally reached a pitch irresistible to the luxury brands. “Melbourne has done a great job of being a first-class city in a lot of ways,” says Corne.

Once Australia’s largest city and known as “Marvellous Melbourne’’ in its heyday following the Victorian gold rush, Melbourne ceded that crown to Sydney in the early 20th century. Further slumps followed in the late 1980s and early ’90s. But the former moniker is once more appropriate – the city is now a regular on world’s most liveable cities lists (it snared top billing on The Economist’s “World’s Most Liveable Cities” in 2002 and was ranked second to Vancouver last year), and in August a BankWest survey found it was Australia’s most liveable city.

While Melbourne missed out on a spot on the global Monopoly board to Sydney in the same month, it did beat the harbour capital with a number-nine ranking in the “Most Liveable Cities” list compiled this year by British lifestyle magazine Monocle. “Melbourne’s economy is humming, its arts scene is thriving and more than 1000 new people a week are calling the city home,’’ the magazine enthused. The list not only ranks liveability on usual measures such as cost of housing, but attempts to define what makes a truly great city, from its architecture to the efficiency of its bureaucracy or the ability to buy a glass of wine or meal late at night.

This layer-cake effect is key to understanding exactly what makes Melbourne tick and it is manifest most vividly in the city’s renowned laneways. There you will find expensive restaurants next to colourful graffiti; edgy art installations among local designer fashion retailers such as Alice Euphemia and Fat; and hole-in-the-wall wine bars and cafes dotted all along the 3.4km of arcades and laneways that have been redeveloped since 1994.

Melbourne’s seamless integration of high and low experiences is also evident in its robust cultural scene, from major institutions (National Gallery of Victoria, the Australian Centre for the Moving Image) to independent galleries and performing arts spaces (West Space gallery, La Mama Theatre). Government-funded festivals such as the Melbourne International Arts Festival and quirky fringe events such as St Jerome’s Laneways Festival enhance the cultural mix.

“Within the city and its environs there exists a core strength of difference and diversity,” says London-based Future Laboratory in a 2006 draft report on revitalising Melbourne’s retail. “Many of the main retail areas exhibit a clear sense of personality that will increasingly appeal to tomorrow’s consumer.’’ Trend forecasters Martin Raymond and Chris Sanderson were asked to compile the report by the City of Melbourne and the state government, which have turned it into a six-year strategy (aptly titled Melbourne Retail Strategy 2006:2012).

Future Laboratory, whose clients include American Express, Nokia and L’Oreal, advised rezoning the city into a variety of shopping precincts, subsidising rents as a way of attracting the right mix of smaller retailers to the city centre, and appointing local shop owners and residents as ambassadors for every street. A nationally recognised Melbourne shopping festival (to kick off in 2010 as part of Spring Fashion Week) and exhibitions promoting local designers in department stores are among the other initiatives advocated in a subsequently released Two-Year Report Card, which also includes a “Graffiti Mentoring Project’’ and a section on “Managing Melbourne’s Weather”.

Many recommendations have been adopted through initiatives such as the City of Melbourne’s Small Business Grants Program (for amounts of up to $30,000 to enterprises in the CBD) and the establishment of a register of potential vertical retailing opportunities to promote above-awning business to landlords and prospective tenants. But the city’s revival is as much due to street-level movers and shakers as it is to bureaucratic machinations.

Barrie Barton founded the Melbourne e-zine Three Thousand (after the CBD’s postcode) with his brother Chris three years ago. “Having returned to the city after 18 months in Sydney, I felt strangely isolated because I couldn’t find out about the things I wanted to do,” says Barton. His weekly email “magazine”, a catalogue of venues and events, is devoted to street culture and advertisers don’t pay for editorial.

“I quickly realised there was so much great subcultural activity in Melbourne without a media voice that didn’t have money to advertise and was too obscure to get regular coverage in print media,” says Barton. “Within just a few weeks it became evident that our simple publication made a significant difference to the people and businesses we featured, and that in itself was reason enough to continue.”

Today Three Thousand lands in the inboxes of 14,000 Melburnians each week and there’s a Sydney version called Two Thousand. “They are markedly different cities,” says Barton. “Melbourne is defined first and foremost by a generous attitude ... people are open with ideas and assist others in achieving their creative goals. Sydney is quite cagey by comparison and the tall-poppy syndrome seems more prevalent. The evident benefit for Melbourne is greater diversity across retail, hospitality and every creative area.’’

Of course, this is nothing new: the synergy between retail, food and culture has been an integral part of Melbourne for more than 100 years. Visitors from other states often exclaim, “How European!” when speaking of its weather, coffee, trams or road system. Melbourne is a city of migrants – a quarter of Victoria’s population was born overseas. In the aftermath of World War II, a large influx of Europeans imbued the city with a love of culture, fine food and fashion. Manifest in families such as the Myers (behind Myer department store and the Sidney Myer Music Bowl) and the Moras (Mirka at Tolarno restaurant and William Mora gallery), this continental sensibility is alive and well today.

It’s this lineage to which Corne appeals when he says his French company’s values are simpatico with Melbourne’s. “At Louis Vuitton we have 150 years of history in quality, creativity and customer service and what we are seeing in Melbourne is an acknowledgement of that.” But for Corne, the real value in Melbourne is, of course, the dollar – as it is for every luxury brand hanging out a shingle on Collins Street. Some of that value comes from Victoria’s success in luring big-ticket events to its capital. “(During) events such as the Melbourne Cup, the Australian Open and the Grand Prix, Melbourne has some very high-profile customers,” says Corne.

On another level the boom in Melbourne luxury reflects the slow-burn mindset of local consumers. “Slow and steady wins the race for us,” says Hermes’ Upton Baker. “Melburnians take longer to warm to something, but when they do they really embrace it, and I think that’s what happened to us in 2007.”

There is also a pragmatic reason for the onslaught of luxury boutiques there – finding the right site is crucial. The refurbishment of the Grand Hyatt site has created a number of opportunities for upmarket labels, such as Louis Vuitton and Paspaley. “Getting hold of the Grand Hyatt site wasn’t easy for us,” says Paspaley executive chairman Nicholas Paspaley. “If we hadn’t achieved that site, possibly we wouldn’t have opened in Melbourne.”

But not everyone is thrilled with the retail renaissance. Local high-end retailers are reporting increased rents at the top end of Collins Street, while independent operators such as Alice Euphemia owner Karen Rieschieck fear the city’s Flinders Lane shopping precinct is losing its charm. Rieschieck, who set up shop there 11 years ago, says the strip has gone through “an inevitable gentrification; it’s been commercialised”. She applauds the Melbourne Retail Strategy and the efforts of council and state government to stimulate growth but asks: “How do you control that, when the landlords really dictate what the culture will be, depending on what they charge and who they attract?”

Walking past Rieschieck’s shop today you will see designs by some of the best up-and-coming talents in Australia, including Romance Was Born and TV. Then you’ll see at least four ersatz versions of her store selling cheap “Melbourne-style” garments made in Asia, next to convenience stores and fast-food franchises.

The commodification of the city has even made it to the US. At Walt Disney World Resort in Florida, the attraction in September was a recreated cityscape of Melbourne’s graffitied lanes, shop-filled arcades and cafes. “I feel embarrassed for all the people who first did graffiti here (in Melbourne),” says Rieschieck. “Something that was meant to be anarchistic has ended up as a marketing tool.”
Luxury labels aside, this tipping point is the real challenge for the city as it moves forward. Managing the retail growth is now crucial to retaining its character in the long term. According to Future Laboratory, “Melbourne, as a city rightly famed for its hospitality and cafe and culture society, needs to appreciate that its ‘alternative’ culture is increasingly the prime tourist draw and act accordingly to attract the 21st-century shopper.”

CITY SLICKERS
Despite tough economic times, luxury brands across the fashion and hotel spectrum are rushing to secure a place in this flourishing city. Melbourne’s Crown Entertainment Complex, Collins Street and the winding laneways of the CBD are hot favourites. Here are just a few of the latest grand ventures that have opened (or are about to open), as well as others undergoing luxe renovations:

Boutiques
RALPH LAUREN
BULGARI
LOUIS VUITTON
PASPALEY
EMPORIO ARMANI
PRADA

Hotels
GRAND HYATT
THE WINDSOR HOTEL
INTERCONTINENTAL HOTEL
HILTON MELBOURNE SOUTH WHARF
CROWN HOTEL