'Fashion capital' loses its shine as sales dwindle

Broadway, hit by empty shops, shut-up businesses and closing-down sales, is 'totally dead now', says retailer Carl Webb. Photo / Sarah Ivey

New Zealand's premier shopping district could be losing its shine, with high numbers of shops forced to close and others selling almost nothing as they hang on.

It is not just small outlets that are struggling; a major shoe retailer sold two pairs of shoes during a working week in July.

The main stretch of Broadway in Newmarket is punctuated by empty stores, shops for lease and closing-down sales as businesses struggle in a post-recession slump in sales.

The Herald counted at least 15 shops which were closed or closing on the strip, which sells itself as the fashion capital of the country.

Furniture store manager Mark Browne said sales at his store were worse than in the depths of the recession. Despite research showing that shopper confidence rebounded in the second quarter of this year, he said Newmarket had seen no tangible improvement.

"It's like someone turned a tap off, about six weeks ago," said Mr Browne. "People want to buy, they like our stuff, but everybody's waiting before they start spending. Confidence is so low. I think Newmarket is losing its lustre.

"We used to get people come in and buy a sofa, first time, for $5000. Now we get people taking 12 hours, several trips, and second opinions to decide whether they want a $400 dining table."

Retailers felt that the rise of internet shopping and mega-malls, such as Sylvia Park, were spelling the end of the high street.

Instead of battling with Auckland's traffic and weather, people bought in the comfort of their own home, or at a single-stop centre. This was evident in nearby shopping centre 277, which had full tenancy and established brands which remained popular.

Carl Webb, owner of shoe and accessory Euro Brands, was closing it down after six months.

He said estate agencies charged high rent on the back of Newmarket's historical image as a shopping hotspot. The costs of rental were now completely disengaged from the financial reality, he said.

"It's totally dead now. During the week, Broadway is deserted. Two or three years ago it used to be buoyant here. But now I wouldn't wish retail work on my worst enemy.

"This place relies on weekend sales, and if you get a rainy Saturday, you'll really struggle to make it up. The margins [of profit] are just too small, and that's before we absorb the GST increase."

Shops have been struggling for some months in Newmarket. Dan Carter was forced to close his Italian fashion store, Gas, this year.

Newmarket Business Association chief Cameron Brewer said the vacancy rate on Broadway was as bad as the early 1990s, when unemployment in New Zealand hit 11 per cent.

The addition of 48 stores at Newmarket's new railway precinct had created more competition in already tough times.

Mr Brewer said it was a "tale of two Broadways". The eastern side of the road had struggled, with frequent closures of small outlets. The properties were leasehold, and prospective shop-owners were put off by the dual costs - rent and a ground lease.

On the western side, more established businesses with long track records continued to record good sales.

Mr Brewer pointed to the opening last weekend of the largest Glassons store in the country as an example of the resilience of large brands in the area.

He also felt that Newmarket was not feeling the pinch any more acutely than the rest of Auckland. Those who owned chain stores agreed, saying their shops in the central business district were faring badly too.

Mr Brewer said he was optimistic sales would turn around in the fourth quarter on the back of tax cuts.

Yet economists predicted that growth in spending was expected to be slow, with a sluggish housing market, tight credit and waning migration figures.

Statistics New Zealand figures indicated the core sales in retail rose 1.5 per cent in June. But because many of these sales were encouraged by aggressive discounting, the value of the sales was low.

Furthermore, improved sales could be attributed to a short-term splurge by the public ahead of GST being raised on October 1.

STRUGGLING

Broadway, Newmarket

* 15 stores closed or empty.
* Some retailers selling less than an item a day.
* Vacancy rates highest since early 1990s.