Has the Australian shopping mall become obsolete amid tough times for retail?

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If you stepped into an Australian shopping centre in the 90s, it would have been a hive of activity. Families browsing Video Ezy, loading up on groceries at Franklins supermarket, or playing with science gadgets at Australian Geographic.

Flash forward to 2025: some suburban department stores are ghost towns, cafes are struggling and empty shopfronts are a common sight.

Several iconic Australian brands have collapsed in the past 12 months, shutting down hundreds of stores and shedding thousands of jobs. Will the Australian shopping mall ever be the same?

Ally Fashion, which launched its first store in Sydney in 2001, was forced into liquidation two weeks ago. Fashion giant Mosaic Brands, which owned a slate of labels including Rivers, Noni B, Millers, Rockmans, Katies and Autograph, is shuttering all its stores and seeking to offload its remaining stock with ‘everything must go’ sales.

Even high-end labels like Dion Lee, sported by the likes of pop megastar Taylor Swift, have failed to survive.

Popstar Taylor Swift, wearing a black corset with her long, blonde hair in a ponytail, stands amongst a crowd at an American football game

Taylor Swift was spotted wearing a corset top by now-defunct Australian brand Dion Lee at the 2024 Super Bowl in Las Vegas. Source: Getty / Lauren Leigh Bacho

Kim (not her real name), worked as a retail assistant at Ally Fashion for over six months before she was terminated last week.

The retailer has immediately closed over a third of its 160 stores, as liquidators weigh up its dire financial state. Around 1,000 Ally employees in total are set to lose their jobs, if the remaining stores are eventually shut.

Kim, 19, never expected to hear her employer was going under.

“I was surprised because I think they’re a very big brand,” she told The Feed.

Looking back, Kim said there were signs that Ally Fashion was in trouble. She said customers had been buying fewer items and gravitating towards the discounted or cheaper pieces.

The entrance to a clothing store with a black feature wall. The word ally in pink text is lit up on the wall

Women’s fashion retailer Ally Fashion opened its first store in Sydney in 2001, and has now grown to 160 stores. Credit: Wikimedia Commons / Sportanions

“I think they have trendy clothes, but it’s not the best quality compared to other [brands],” she said.

“Some clothes are definitely a bit too overpriced for that quality.”

She said Australian brands play it too safe and lack creativity in their designs.

The Feed has reached out to Ally Fashion for comment, but did not receive a response.

Why are so many retailers on the brink of collapse?

Australians on TikTok have made a game out of speculating which retail chains may go under within the next five years.

Cafes and mid-tier fashion and shoe retailers have been hit the hardest by the cost-of-living crisis, says retail marketing researcher Professor Gary Mortimer, from the Queensland University of Technology.

“We know that when discretionary income decreases, people are more concerned about paying off debt, paying rent, putting fuel in the car — they’re less likely to go out and buy fashion, footwear,” he said.

“People are less inclined to go out and buy morning coffee.”

Mortimer said on top of the spending slump, retailers are dealing with higher wages, electricity and rent prices, while the wholesale cost of coffee beans has doubled in the past year.

Some tough years of trade have spelled the end for Michel’s Patisserie, a bakery cafe franchise that’s been around since the 80s.

Last month, parent company Retail Food Group (RFG) announced all Michel’s Patisserie stores would shut down, with the option to convert them to Gloria Jeans or Donut King stores.

An RFG spokesperson said: “While Michel’s Patisserie has a long history within Australia’s retail food market, a brand assessment has confirmed a variety of barriers to driving future brand growth.”

For mid-tier fashion retailers, competition can be cutthroat.

Mortimer said Australian chains, who mainly focus on traditional styles, are vying with international brands offering trendier looks copied straight off the runway, often at more affordable price points.

A large glass-fronted Uniqlo store with a group of people surrounding the entrance

Japanese casual clothing brand Uniqlo has gained popularity internationally, including in Australia. Source: Getty / winhorse

“Mid-tier fashion apparel businesses are very exposed to the growth of fast fashion retailers like Uniqlo, Zara, H&M, which can produce new designs, new colours very, very quickly,” he said.

“They’re also exposed to the likes of pure play (online-only) retailers like Shein and Temu, which are really taking a cut out of that sort of mid-tier, cheaper quality offer.”

Kim, who’s a marketing student at the University of Sydney, believes Australian retail chains suffer from a lack of innovation.

“I think they copy the same styles from different stores and they make it their own,” she said.

Traditional department stores Myer and David Jones are amongst the most at risk during tough times, according to Mortimer. It’s a far cry from the cultural influence they enjoyed in the 80s and 90s, as a go-to shopping destination for Australian and international fashion.

Top view of a department store. People walk past a Benefit browbar decked out in pink decorations and perfume counters

Myer’s profits have dropped in recent years and the department store has closed several suburban stores. Source: AAP / MICK TSIKAS/AAPIMAGE

While their flagship stores in city centres appear to be busy, some suburban department stores have been forced to shut their doors in recent years.

“We don’t go to Myer or David Jones anymore to buy our furniture or white goods or consumer electronics or our sporting goods. So the department store has sort of been eaten away by category killers: JB Hi-Fi and the like,” Mortimer said.

In an effort to grow its business, Myer took over the clothing brands Just Jeans, Dotti, Portmans, Jay Jays and Jacqui E in January.

“These are mid-tier fashion retailers, very much like Mosaic Brands, very much like Ally. Bolting on another 780 individual stores is I think somewhat a risk for Myer,” Mortimer said.

Which retailers are doing well?

The supermarket and grocery sector is faring well, as well as discount department stores like Kmart, Target and Big W, according to Mortimer.

“When times are tough, people shift away from more expensive options to cheap and cheerful,” he said.

However, this isn’t true for the top end of the price range: high-end designer brands.

Mortimer said luxury brands are immune to the cost-of-living crisis because their target market consists of tourists and highly paid professionals over the age of 55.

“Those types of consumers who are going out buying $8,000 handbags aren’t too concerned about: Will they make their mortgage repayment next month? And in most cases they don’t have a mortgage anyway,” Mortimer said.

Sales still slow, but hope is on the horizon

The latest retail trade figures from the Australian Bureau of Statistics show that in January, retail spending rose by 0.3 per cent month-on-month, and was 3.8 per cent higher compared to last January.

The Australian Retailers Association (ARA) was cautiously optimistic about the bump in spending.

“Looking ahead, whilst these results are heartening, retail is far from out of the woods. Cost-of-living pressures remain acute and it is likely to remain a challenging year for retail,” the ARA’s chief industry affairs officer Fleur Brown said in a statement.

Mortimer said the uptick in spending is likely a “sugar hit”, as consumers grow more hopeful about the economy, following an interest rate cut and lower inflation figures.

“I think there’ll be a slow, gradual return to spending across the rest of this year, hopefully buoyed by further interest rate cuts,” Mortimer said.

The future of Australia’s shopping centres

As our retail stores change, so too does the culture of Australia’s shopping centres and high streets.

Supermarkets with large storefronts may become a thing of the past, with around 10 per cent of groceries now bought online, according to Mortimer. Many fashion retailers are now moving to an online-only business model.

Mortimer speculates the shopping centres of the future will focus on providing services, such as dentistry, physiotherapy, optometry, massage services, medical centres, gyms and childcare centres.

A photo from the 1990s showing a shopping high street with people walking and sitting around. Stores lining the street inclue Jacqui E and Foot Locker

With retailers struggling to survive the cost-of-living crisis, is the Australian mall of the 1990s now dead? Source: Getty / ullstein bild

“I think the most innovative one I said was … Indooroopilly (Shopping Centre) in Brisbane, which got rid of an entire floor of Myer and a bunch of specialty stores, and it’s created a car dealership.

“So you can … get your groceries and buy a car.”

Mortimer said retailers will need to innovate to survive. That includes catering to Australia’s ageing population and smaller families, or perhaps adopting technology like facial recognition, which has enabled cashier-free shops overseas like Amazon’s “just walk out” supermarkets.

“You need to be ahead of the game if you’re going to survive in retail,” Mortimer said.

As store closures continue, retail workers’ livelihoods will be threatened in an already tight job market.

The last time Kim applied for a retail job, she received a rejection email informing her she’d been competing with 900 other applicants.

“It definitely impacts me in terms of not having enough money to pay for my expenses,” she said.

“It’s kind of difficult to find a retail job right now, it took a while to get my job at Ally. So it will be a little stressful for me.”