More of Australia’s favourite retail brands are expected to disappear as businesses battle a multibillion-dollar onslaught from cautious consumers and cut-price overseas outlets.
Iconic Australian fashion retailer Cue Clothing, about to celebrate 60 years in business, is now on its knees along with its stablemate Veronika Maine. The future of 51 stores and hundreds of employees hangs in the balance.
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The embattled business is discounting stock as receivers hunt for a buyer.
Michele Levine from Roy Morgan Research says retailers are facing unprecedented challenges.
“It’s a really difficult market for retailers,” she said. “Economically, you’ve got really low consumer confidence. You’ve got inflation high.
“You’ve got people’s expectation about inflation even worse. You’ve got unemployment, mortgage stress, cost of living … it’s a really challenging economy.”
Overheads are spiralling, with transport, taxes and leasing costs eroding profits.
Retail expert Barry Urquhart says the situation is dire
“Margins are squeezed,” he said. “Costs are up. Utility expenses are profound. And there’s no way out.”
Making matters worse, millions of Australians are turning to ultra-cheap Chinese rivals Temu and Shein.
“Our data suggests that they’re taking $14 billion or so out of that market each year,” Levine said.
“This is not a pretty picture that we’re looking at now.”
The hope is that both brands can survive while the hunt for a new owner begins. But experts aren’t confident, saying retail insolvencies have tripled over the past four years.
“The future has arrived and it’s not looking good for many established retailers,” Urquhart warned.
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