Christian Dior opened its first Australasian flagship boutique in Sydney last week, reflecting continued demand for luxury fashion despite the tough economic climate.

The new store is designed to replicate Dior’s renowned boutique on Paris’s Avenue Montaigne. It is located in the former Louis Vuitton store on the corner of King and Castlereagh streets.

Designed in the style of a grand Parisian apartment, with a dozen distinct rooms, the store spans four storeys and features women’s ready to wear, menswear, timepieces, accessories and fine jewellery.

In recent months, Chanel, Gucci, LV, Prada, Miu Miu, Salvatore Ferragamo and Bottega Veneta have either set up for the first time in Australia, opened in more locations, or rejuvenated existing stores.

Australia has become a target for luxury brands lured by a high Australian dollar, a healthy economy compared with Europe, and proximity to the emerging Asian market.