INTERNATIONAL and upmarket retailers are taking up the slack where local brands falter.

The slump in local retail conditions has not deterred mens fashion outlet T. M. Lewin from opening a flagship store in Collins Street. The British-based clothing retailer is set to open a 220-square-metre shop at 356 Collins Street early next year in a deal negotiated by CBRE agents Zelman Ainsworth and Max Cookes.

It will join several other well-known brands targeting men's corporate fashion - Thomas Pink, Rhodes & Beckett, TAG Heuer and Henry Bucks - in the strip.

The shift of upmarket retailers from the top ''Paris'' end of Collins Street towards the mid-section was being driven by white-collar workers and cheaper rents, Mr Cookes said.

''There are more white-collar workers in this block than the Paris end,'' he said.

October retail sales figures show that while national sales by chain stores and other large retailers were up 4.4 per cent on a year ago, during the month retail sales were flat.

In Victoria they dropped by 0.5 per cent.

According to the latest CBRE retail research, despite 2012's lacklustre retail outlook, Melbourne's retail vacancy rate remains strong because of a lack of supply.

During the first half of the year, vacancy rates among retailers with street frontage rose by just 0.75 per cent despite 10 - mainly youth-oriented - stores closing.

''The lack of supply has meant that vacancies have not increased dramatically during the first half,'' CBRE said.

Rents in Collins Street's middle belt average between $2000 and $2200 a square metre per year with a shop like T. M. Lewin likely to outlay about $425,000 net per annum, sources suggest.

Other leading international clothing brands were also looking to establish flagship stores in the same area.

They include Lacoste, Trenery, M. J. Bale and Herringbone, one insider said.

sjohanson@fairfaxmedia.com.au