Are department stores really a relic of the past, destined to fade away like so many once-beloved institutions? The headlines might have you believe so, especially after recent closures. But hold on – there's a plot twist! The arrival of luxury retailer Faradays on Queen Street in Auckland signals that these grand shopping halls might just have a future after all. What's the real story behind the past, present, and potential future of department stores? Buckle up, because we're about to dive in.
Last week, amidst the usual news about Auckland's CBD, a glimmer of hope emerged: Faradays, a high-end retailer from Parnell, announced plans to open a three-story "luxury department store" in the historically significant Milne & Choyce building at 131 Queen Street. This ambitious project, with a price tag of $30 million, promises a glamorous experience, including hospitality services, valet parking, and a stunning spiral staircase. While the specific brands haven't been revealed yet, we can expect apparel, homeware, beauty products, and other luxury items. The new store aims to attract a "broader market" than the original Faradays, which focused on very high-end labels. The grand opening is scheduled for mid-2026, and Auckland's mayor, Wayne Brown, is reportedly "thrilled."
But first, a quick introduction: What exactly is Faradays?
Faradays is a ritzy, multi-brand concept store located in Auckland. The core idea is to offer a wide array of categories and brands all under one roof, creating an engaging and visually appealing shopping environment. The first store opened in 2021 on Faraday Street in Parnell – named after the renowned scientist Michael Faraday – on the ground floor of the historic Textile Centre.
The Textile Centre building has its own interesting history. Constructed in the early 1900s, it initially housed wool and hemp businesses. For a short period in the 1980s, it even served as a residence for members of the Centrepoint community. After changing ownership in 1989, the building was transformed into the Textile Centre. However, the "collapse of the textile industry" led to another reinvention: premium office spaces. Faradays eventually joined these office spaces, creating considerable buzz and signaling a "new era of luxury" retail. The store offered a selection of brands that previously required a passport and significant spending power (it was, notably, the first store in the Southern Hemisphere to carry Alaïa).
So, what's the deal with the Milne & Choyce building on Queen Street?
That's an excellent question! Built in 1926 by the pioneering department store Milne & Choyce, the building allowed shoppers to purchase custom-made clothing, in-house labels, and access the latest international trends (Italian fashion was showcased to "great excitement," according to the New Zealand Fashion Museum). It also featured a rooftop garden, Queen Street's first escalator, and six elevators. For a time, it was considered "one of the largest and most modern department stores in the country." Sadly, the company's flagship location closed its doors in 1976.
And Milne & Choyce wasn't alone. Its competitors eventually met the same fate. Karangahape Road lost Rendell's (1884-2006) and George Court & Sons (1926-1988). Retailing was a family affair for the Courts; George's brother John established his own department store on Queen Street (where Farmers is now located), while his great-grandson, Steve Tindall, founded a well-known business called The Warehouse.
Now, doesn't a Queen Street department store sound familiar? Weren't we just talking about this recently?
You're right! Auckland recently lost Smith & Caughey's (and its beloved Christmas windows) in June after a remarkable 145 years in business. Tony Caughey, the chairman, told the Herald that the past five years had seen a 40% drop in revenue due to a "perfect storm" of factors, including declining foot traffic and increased competition. Around the corner, in the historic Customhouse building, T Galleria also closed down. Its owner, DFS, shut down its New Zealand and Australia operations after 30 years, citing "challenging economic conditions."
Another casualty was The Department Store in Takapuna, which closed in 2020. Launched a decade earlier, it was once hailed as the world's best new retail destination by Monocle magazine. It reinvigorated the department store format by combining designer fashion, a cafe, and a salon in a stylish, modern setting. It was definitely worth a trip across the Harbour Bridge. However, as co-founder Karen Walker told The Spinoff, "Most of our customers were coming from the cityside... Ten years ago that was the concept of a destination store and now it’s not... Now, the idea of a destination store [involves] browsing with your thumbs. That’s how people shop. Retail now is about small local stores and web."
Oh dear, this isn't sounding good. What about the rest of the country?
It's a similar story. Queenstown lost its luxury department store when DFS departed this year, taking the Resort Galleria concept store, which opened in 2022, with it.
Wellington's Kirkcaldie & Stains closed in 2016 ("financial pressures") after a remarkable 150 years. It was replaced by David Jones, which, after a rumored $20 million refurbishment, left in 2022 (due to declining foot traffic). James Smiths, a department store on Cuba Street that traded for 126 years and even once stocked a three-seater airplane, closed in 1993 ("falling profits and changing shopping habits").
Palmerston North once boasted retailers like Watchorns Ltd, Garners, and Watson Bros.
The department store chain D.I.C. was founded by Bendix Hallenstein (yes, that Hallenstein) in Dunedin in 1884. At its peak, it had 16 stores and absorbed other department stores like Christchurch's Beath's. However, changing consumer habits (the rise of shopping malls) contributed to its sale to competitor Arthur Barnett in the late 1980s, which was in turn sold to H&J Smith in 2015. The H&J Smith store closed in 2022 after 123 years.
But here's where it gets controversial... Bucking the trend, Canterbury's Blackwell's Department Store, established in 1871, is still going strong in Kaiapoi. Ballantyne's is also still trading, although the retailer announced staff cuts last week due to rising costs and "evolving consumer behavior."
I'll be honest, I didn't realize department stores were once so popular...
Oh, they were! Many had tea rooms and other novelties, acting as a sort of "third space" for people to gather. Department stores evolved with the times, transitioning from made-to-measure services and drapers to ready-to-wear clothing, benefiting from rising disposable incomes and increased consumerism. The relaxation of import restrictions in 1982 made international labels more accessible, but it also led to increased competition. International chains entered the market, and shopping malls offered more choices than ever before.
Department stores maintained the glamour and exclusivity that fueled aspirational shopping through the 1990s and early 2000s. Overseas, retailers like Bergdorf Goodman and Barney's in New York retained their cachet as designer awareness grew (some even stocked New Zealand brands like Karen Walker).
Competition intensified when online shopping took off and changed everything. Evolving consumer behavior was further accelerated by the pandemic and rising living costs. The question of who or what is to blame for retail's struggles has been debated ever since. While some fingers have been pointed at Gen Z's shopping habits, they're not the only demographic whose habits have changed.
Oh boy. Is there any hope for department stores to survive?
Actually, yes! While US department stores have lost market share, international giants like Nordstrom, Macy's, and Bloomingdale's have all reported growth this year after reducing their store footprints, adjusting their assortments, and improving the in-store experience. David Jones is investing AU$65 million in transforming its tech capabilities, and gross profits are up at Aussie retailer The Iconic, which has announced a focus on New Zealand designers.
It's not unreasonable to think that overwhelmed shoppers might be seeking a curated perspective and offline interaction. On a practical level, well-executed multi-brand stores offer a valuable service. Instead of scrolling through endless white shirts online, you can visit a store and try on several options in person.
While New Zealand's per-person volume retail sales have been declining for years and an increasing number of shoppers are choosing low-cost offshore websites, the tide may be turning, and local retailers are expressing "confidence." Although spending has fluctuated, Auckland's downtown saw a significant boost with the return of New Zealand Fashion Week. At the higher end of the market, experts point to increasing local demand for designer fashion, noting that the in-store experience is "critically important" to luxury retailing.
Foot traffic has increased on some blocks of lower Queen Street, where Faradays will join brands like Gucci and Prada. Cartier is also on its way. (Many more brands can be found at Westfield Newmarket, where David Jones is an anchor tenant).
So, who's left standing in the department store arena?
Some high-end department stores, like Ballantyne's, are holding their ground, as is Farmers. Luxury shoppers are also well-catered for, with flagship stores and multi-brand boutiques like Edit, Muse, and Scotties. In the CBD, many apparel retailers have migrated downtown to Commercial Bay, Britomart, and the lower blocks of Queen Street. And soon, they'll be joined by three floors of Faradays.
Now, here's a question for you: With the rise of online shopping and changing consumer habits, do you think department stores can truly make a comeback? What could they do differently to attract and retain customers in today's market? Share your thoughts and opinions in the comments below! Are you excited about Faradays' new venture, or do you think the department store model is fundamentally flawed in the modern era? Let's discuss!
