THE decision by Sony Australia to close its World Square store in Sydney's George Street and open smaller kiosks is another signal of the fast-moving and highly competitive world of smart devices and communication technology.
A company spokesperson said Sony Australia remained committed to pursuing direct retail avenues and locations that would meet the needs of its customers.
In response to the changes in consumer behaviour, Sony said it would focus on an extension of the kiosk- style store that operates in Westfield Chatswood in Sydney.
''This retail model offers shoppers the opportunity to get hands-on with Sony products in a flexible, high-traffic location,'' the company said. Its peers, Apple and Samsung, are also looking to expand. The two operate stores at the opposite end of George Street and are busy at all times during the day, reflecting the high demand for technology.
The move also shows the changing face of Sydney's main shopping thoroughfares - George, Pitt and Castlereagh streets - from traditional clothing and electronic retailers to more food and coffee shops and restaurants.
The director of retail leasing at Knight Frank, Alex Alamsyah, said Samsung was understood to be planning to open 12 demonstration stores in Australia.
Mr Alamsyah said that when the international retailers (Samsung, Microsoft, H&M, Abercrombie & Fitch, Ralph Lauren, YSL, among others) made inquiries regarding their first flagship stores in Sydney's CBD, the choice of location came down to the big three locations: George Street, which is ideal for technology, fast fashion and luxury; Pitt Street Mall, ideal for fast fashion, and Castlereagh Street, which is suited to luxury goods.
''From time to time, these three major streets are competing against each other for the top spot. As a result, we have seen the rise and fall of George Street, Pitt Street Mall and Castlereagh Street in the past 10 to 15 years,'' Mr Alamsyah said. ''George Street used to be the poor cousin to the Pitt Street Mall, but that is changing with the opening of Apple, Louis Vuitton, Topshop and the newest, Tommy Bahama, the US retailer that took over the ex-Seduce site at Ivy, George Street.''
George Street is also undergoing a $180 million transformation by the City of Sydney, which could take some of the competition from Pitt Street Mall in coming years.
There is also a review being undertaken by the Dymocks family, which owns the building and the Dymocks bookshop, which occupies 3500 square metres over three levels. Given the weaker state of the book industry, the bookshop may be reduced, with some of the ground floor and basement being leased to another international retailer.
Mr Alamsyah said Castlereagh Street still held the title of the heart of the luxury precinct, home to major luxury brands such as Christian Dior, Chanel, Gucci and Prada.
The owner of the Country State building at 74 Castlereagh Street, Country State Group, has recently lodged a redevelopment application for the site. The regional director of retail services, Australia and New Zealand, at CBRE, Josh Loudoun, said the new international brands were performing well and fuelling demand for prime CBD locations.
He said there was ''significant interest from international groups looking to capitalise on the proposed changes to George Street''.
''Australia continues to rank highly on the world stage for rent levels, which is supported by the shortage of prime locations and Australian retailers achieving some of the highest profit margins in the world,'' Mr Loudoun said. ''We forecast this will continue despite the pressure of online retailing.''