“Even within the Prada group there are brands that may be better suited to the audience here.
“The fundamentals of Queen St are strong, as are the future indicators with Britomart’s announced redevelopment, Te Waharoa, the city’s new international cruise terminal and the revitalisation driven by CRL. Luxury brands typically play the long game and know that opportunities in tightly held areas rarely come along.
“While other luxury brands have steadily increased presence and rarely exit markets, Prada has had a history of adaptation. In 2012, the company pulled back retail presence to heighten its ‘scarcity value’ and more recently it has been right-sizing representation in regions as part of its broader moves to bring the Versace stable into its fold.”
Retailers generally have been under pressure lately.
Stats NZ’s latest Electronic Card Transaction data for September shows actual core retail spending rose just 0.1% compared with the same month last year, including food and fuel. Apparel spending was down more than 5%.
Simplicity chief economist Shamubeel Eaqub said the luxury market had been hit globally, “especially because the aspiring middle classes have pulled back on luxury purchases. So the uber-wealthy market remains as it always was. But the growth via aspiring middle is currently less so”.
Gareth Kiernan, chief forecaster at Infometrics, said he thought underlying economic conditions were likely to have had a limited influence on the decision to close.
“That luxury precinct at the bottom of Queen St is like another world, and it has remained highly sought after in recent years, despite the lingering effects of Covid, CRL and other cityscape construction, and the drift away from physical retailing that have been more evident on the retail sector further up Queen St.
“I expect there are broader business strategy reasons behind the decision, and Auckland isn’t seen as enough of a growth market compared to other opportunities internationally.”