Zara's impending entry into Australia underscores what could be a dramatic internationalization of the Australian retail marketplace.  The impact on shopping centers and on home-grown brands in the event of a large influx of major foreign retailers is going to be uneven, nuanced and profound.

As I pointed out in an article in the Age/SMH a couple of weeks ago, Zara and other incoming foreign retailers must, to be effective, take flagship positions in the major CBDs.  If this happens it will ultimately tilt the power balance between CBDs and suburban shopping centers toward the former even if smaller units of the foreign retailers operate out of shopping centers.  

June same-store sales results for US retailers were, with one or two exceptions, awful.  The observations I made in my last post on May 26 have proven to be reflective of the true state of things in Stateside shops.  Imminent recovery is not yet a foregone conclusion at all and it is not hard to see why fashion chains are falling over themselves to increase their exposure as quickly as possible to emerging markets.

Gap's North American stores were down 3 per cent in June on top of a 10 per cent decline in the same month last year.  Abercrombie & Fitch was up 9 per cent but should have risen a lot more given that it crashed 32% in June 2009.  American Eagle was down 1 per cent following an 11 per cent decline a year ago.  

Among the specialty chains, Victoria's Secret stood out with an increase of 17 per cent following a 14 per cent decline a year ago, meaning that it was one of the few names with a positive two year stack.  

Other strong performers were off-pricers TJX and Ross, both of which had positive same-store sales in June both this year and last.

Meanwhile, May results in Australia were also very weak.  Japan and most of Europe are faltering. China, Hong Kong, Singapore and South Korea are really setting the pace right now, with Malaysia and Thailand also recovering.