If bricks-and-mortar retail is stagnating, Collins Street isn’t buying it. While former Melbourne retail strongholds such as Chapel Street are lined with “for lease” signs, the historical CBD thoroughfare has seen a new, unprecedented wave of investment from European fashion houses including Gucci, Fendi, Burberry, Versace, Christian Louboutin, Cartier, Bottega Veneta and Hermès.

There are permanent queues outside Gucci’s heaving 4520-square-metre flagship at 161 Collins Street, which tripled in size after a recent multi-million-dollar expansion. It now takes, on aver- age, half an hour to get inside – and the Italian luxury fashion label has two "bouncers" managing foot traffic. When you do manage to get over the threshold, you’re directed to a velvet armchair and offered a bottle of Evian while you wait another 15 minutes for the privilege of browsing.

“Ten years ago this [expansion] wouldn’t have been possible,” says Zelman Ainsworth, the director of commercial real estate company CBRE. He negotiated the lease for Gucci as well as agreements for Fendi, Burberry, Versace and Christian Louboutin, all of which recently opened flagships on Collins Street. “[Collins Street] has become the Rodeo Drive of Melbourne,” he says. “We’ve seen companies recognise that they need to be represented on Collins Street in the same way they’re being represented in London or New York.”

Bottega Veneta, a luxury Italian leather goods and accessories label, launched in the Australian market in 2011 but only unveiled its first Australian flagship in January last year, at 161 Collins Street. The grand 3046-square-foot store is a spectacle beneath the neo-renaissance T&G building. Then-creative director Tomas Maier (he stepped down from the role in June 2018) spared no expense on the fit-out. There are walnut tables, handcrafted leather door handles, walls covered in custom-dyed suede and New Zealand wool carpets.

These labels, some of which might have in the past viewed Australia as a regional outpost, are now spending as much money on their Collins Street flagships as those in major shopping meccas around the globe. They arrive with pockets as deep as $50,000 per square metre to spend on lavish cookie-cutter fit-outs, with imported European materials, which typically last five years before they’re refreshed.

Among them is Italian fashion house Fendi, owned by luxury group LVMH. It moved in below the Athenaeum Club at the east end of Collins Street in August last year, taking over a 400-square-metre space. And there’s more to come: Loewe, Balenciaga and Valentino are rumoured to be circling (all three already have Chadstone stores), and Balenciaga has reportedly signed a deal to take over Ralph Lauren’s 181 Collins Street lease.

Chadstone Shopping Centre has become one of the city’s dominant luxury retail destinations over the past decade, and in recent years lured high-end fashion labels such as Celine, Moncler and Loewe to open their first and only Melbourne flagships there. But this latest influx of luxury tenants – and revamps – on Collins Street reinstates the precinct as the home of luxury fashion in this city. It resembles the famous shopping boulevards of New York, Paris or London.

“The value of having a flagship in the city is, the retail spaces are often larger, as it’s a flagship street,” says Alister Reid, the president of the Collins Street Precinct Group Committee. “Businesses will put their best staff forward and provide a wider range of product. You don’t find independent brands like Harrolds in shopping centres.”

According to a number of market research firms, increased tourism to Australia coupled with an affluent local population has meant higher demand and profits for luxury retailers here. The Australian luxury retail sector is forecast to grow to $2.2 billion in revenue by the end of 2019, according to IbisWorld. Deloitte predicts that luxury retail sales will increase by six to eight per cent each year through 2024 – twice the rate of Australian retail in general.

“Luxury retailers see huge value in operating on Collins Street from a branding point of view,” says the director of Melbourne city sales at Colliers, Oliver Hay. “It’s supported by heavy Asian market consumption and improved tourism traffic in the precinct. “The demand for space from international designer retailers continues to rise.”

Because of year-on-year demand from luxury tenants looking to secure space along the eastern end of Collins Street, rents have risen amid fierce competition between local and international labels. “Landlords know that prospective tenants are prepared to pay a premium price for the location,” Reid says.

Rising rent was the final nail in the coffin for fashion institution Cose Ipanema, which closed its 113 Collins Street store in February 2018 after 25 years on the strip. Long considered the first and last stop for luxury and high-end menswear and womenswear, the boutique is credited with introducing Melbourne to Japanese labels Comme des Garçons, Yohji Yamamoto and Issey Miyake, and Belgian labels Dries Van Noten and Dirk Bikkembergs.

“When it opened, there was nothing like this in Melbourne. It was very European, very Milan,” says Cose Ipanema’s buyer and manager, Sam Hussein, who’s been with the company 20 years.

“All the big fashion houses [are now] the only ones who can trade there, not smaller businesses like ourselves. It’s very hard to make it work on Collins Street,” says the company’s South Yarra store manager, Elisa Bete, who’s also worked for the business for two decades.

Rising from the ashes of Cose Ipanema is Céline, which is poised to take over the double-storey space later this year. It will be its first store outside a shopping centre in Australia. Cose Ipanema, meanwhile, is looking to return to this part of the CBD; it’s searching for a more affordable site in the surrounding laneways.

For the designer-founder behind Melbourne accessories label A-esque, which opened its Collins Street flagship in 2014, foreign fashion arrivals have been of benefit. “Celine going in next door – that’s a pretty big win for Collins Street,” says Amanda Briskin-Rettig. “Great energy helps retail. I think it’s fantastic people are showing confidence [in bricks-and- mortar] and that will encourage people to be there.” And rising rents? “You’d expect that,” she says. “Yes, it has gone up. Yes, as a retailer I never want my rent to go up. But it’s all relative to your sales. More openings means more sales.”

Meanwhile, high-end Melbourne footwear retailer Double Monk is said to have acquired a lease on Collins Street for their soon-to-be announced menswear line. And Melbourne denim specialist First Principles opened its first Australian flagship around the corner on Little Collins Street in November last year. “The Paris end of Collins was alluring largely due to the influx of international designers occupying beautiful boutiques,” says the label’s co-founder, Rannia Al-Salihi. The location just off the main drag has been tough but worthwhile. “You pay a premium for a boutique space over an Emporium location, for example,” she says, referring to the prestige city shopping centre. “But we’ve found that landlords are just as concerned with the quality of their tenants as with yield on their property.”

Little Collins Street was the right fit for local label Elk, says director of sales Nid Kelly. “It ticked all the boxes, we can still hold our independence and have that small boutique ethos,” she says. Like Briskin-Rettig of A-esque, she believes the big international fashion houses have a net positive effect. “There’s good and bad that come with it [but] we embrace it,” she says. “The more fashion the better, really. Those higher-end luxury brands do such a beautiful job.” She’s also noticed a change in customers in the area over the past two years. “When we first opened it was very much business people coming down from the big banks. Now we’re finding a wider mix of people who are sick of going to Emporium.”

Rent isn’t the sole challenge for operators on the strip, though; they’re thinking about global demands too. Shoppers expect an Hermès store in Melbourne to feel as luxe, considered and grand as its store in Paris. A-Esque, Hermès, Cartier and Louis Vuitton have all recently refurbished their boutiques, investing significant capital to keep pace and compete against newer arrivals.

“As everybody around you is remodelling, you have to make sure you don’t look tired,” Briskin-Rettig says. “We shuffled [the store] around and made it feel more like a showroom than a shop; it looks more like a lounge room.”

This kind of investment is vital in a world where new clothes are just a few clicks away. More than ever, stores need to create deeper, more human connections with their customers and give them a dynamic experience.

“We’re getting face-value feedback every day,” says Briskin-Rettig. “People are looking inside the bags, touching them, feeling them. While we’re not reaching people globally [like Instagram does], the connection to the customer gives us a reality that’s really important.”

This story originally appeared in Melbourne print issue 26.