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Are Australian retail businesses in trouble?

Images: Getty, AAP
Images: Getty, AAP

As more international brands enter our retail market and competition continues to heat up, yet another Aussie business has waved a white flag.

Aussie fashion chain Sussan – the brand behind popular names like Sussan, Sportsgirl and Suzanne Grae – is the latest to in a long line of troubled retailers, having hired an asset manager to assist in finding a buyer, The Australian reports.

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Fallen businesses

It’s a long list.

Plus-sized retailer Maggie T entered administration in January this year, following luxury handbag retailer Oroton in late 2017.

Chocaholics’ favourite, Max Brenner has also had a tumultuous few months, entering administration only to have its sale fall through.

The Reject Shop has suffered an extreme profit slump.

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Major brands like Dick Smith and Top Shop have also been having some tough conversations, and Roger David, a brand with a 76-year history also shut down.

International brands taking over?

The administrators for Roger David, KordaMentha’s Craig Shepard and Leeanne Chesser put the company’s collapse down to the boiling levels of competition.

“Roger David, like many other fashion retailers, has been buffeted by global competition, stagnant sales and rising fixed costs,” Shepard said.

The situation has even got the Reserve Bank of Australia paying attention.

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“Retailers are facing a challenging environment of increased competition, slow growth in consumer spending and changing consumer preferences,” the RBA financial stability department’s Gabriela Araujo and Timoth de Atholia said in September.

They said international retailers tend to have lower costs and the economic benefits that come with size, while online retailers are continuing their market share creep.

At the same time, Aussie consumers’ preferences are changing. They prefer to spend their money on services like restaurant or cafe meals than goods.

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However, while the RBA acknowledged the “high-profile failures”, the analysts argued these have been isolated, with most retailers in good financial health.

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