During its 1990s heyday, Chapel Street was widely regarded as Australia’s premier fashion and entertainment strip.
Independent boutiques sat shoulder to shoulder with emerging designers, cafés buzzed with customers throughout the day, and by night, queues formed outside legendary nightclubs and bars that defined a hedonistic era of Melbourne nightlife.
The Prahran home of nightclub Revolver Upstairs, where celebrities including Snoop Dogg, Hugh Jackman, Deborra-Lee Furness and Fatboy Slim have partied or performed. Pictures: Zoe Harrison, Presley Ann/Getty Images, Brenton Edwards.
Fashion historian Dr Paola Di Trocchio described 90s-era Chapel Street as both a fashion and cultural mecca and rite of passage for teenagers.
“You could spend a whole day there. You would start in South Yarra and look at all the high-end brands you couldn’t afford, then you’d get to Prahran, which had the cool cafés and clubs, then finish up in Windsor, with its bespoke and grungy energy,” she recalled to ABC Melbourne.
Perhaps few businesses best reflect Chapel Street’s pinnacle than Jay Dillon, one of the strip’s longest-running independent fashion boutiques, trading in South Yarra for almost half a century.
Owner Tony Christakakis said Chapel Street once fostered an environment where business owners were encouraged to take risks.
“Independent stores developed their own identities and fed off each other through a kind of cross-pollination. We weren’t just competitors; we lifted one another up. That energy brought people here in their droves which benefitted all the cafés and restaurants. It was a vibrant, predominantly independent retail scene,” Mr Christakakis said.
George Zogoolas (right) owned popular Chapel St hot spots Chasers and Love Machine.
What's become of Chapel Street?
But more than two decades on, many consider the once vibrant shopping strip a shadow of its former self.
“Chapel Street was one of the greatest tourism destinations in Victoria where people would travel from overseas to go shopping,” Liberal MP Brad Battin said. “Now the only image you see on TV is of someone running down the street with a machete past closed shops.”
Battin’s comments reflect a broader shift in how the strip is now perceived; from fashion and nightlife capital to a precinct increasingly associated with crime.
The Lucky Coq pub on Chapel Street. Picture: realcommercial.com.au
Last year, arsonists torched a Chapel Street dessert bar in the early hours, causing extensive damage to neighbouring businesses, while in January, a man suffered severe burns after a bungled firebombing attempt linked to organised crime.
And just days ago, the former Love Machine nightclub was destroyed in a suspected arson attack after offenders allegedly forced entry and set the building alight.
Retailers also continue to grapple with persistent shoplifting and anti-social behaviour, however Mr Christakakis insists crime is not unique to Chapel Street.
“There are crime problems happening in shopping centres right across the city. But because of its profile, Chapel Street seems to attract more media attention, which creates a sense of paranoia and makes it even tougher for retailers,” he said.
Revolver Upstairs was for sale as recently as October 2025. Picture: Supplied
Chapel Street Precinct Association general manager Matt Lanigan said the strip was in a period of transition, where reduced foot traffic makes anti-social behaviour appear more pronounced.
“There are certainly pockets where Chapel Street can feel a little deserted and that’s where some of those undesirables tend to gather, which makes them stand out more,” he said.
Mr Lanigan pointed to an absence in government strategy required to address the issue.
“No one at a local or state level is really taking ownership of how to fix the problem, which is the difficult part,” he said. “Having said that, I think the situation can be overstated. It’s not all doom and gloom, firebombings and druggies on the street all the time.”
Tony Christakakis, owner of Jay Dillon menswear store. Picture: Chapel Street Precinct Instagram
The cost of success
In mid-2025, commercial property agency Fitzroys estimated one in 12 shops along Chapel Street sat vacant. Associate Lewis Waddell told realcommercial.com.au that figure has edged up slightly in the past 12 months.
“Over a longer period, vacancies are down from the pre pandemic levels which reached around 25% in some sections of the street. Right now, they are still under 10%," he said.
With Chapel Street no longer Melbourne’s premier retail strip - a title now arguably claimed by Armadale’s High Street - the question is, how did it get to this point?
Armadale, adjacent to Prahran, is currently a hot shopping and nightlife area. Picture: Getty
Tony Christakakis argues the shift began in the early 1990s, when Chapel Street became a victim of its own success.
“Because the street was doing so well, opportunistic agents encouraged landlords to implement market reviews. So instead of rents rising by around 4% annually, they jumped by as much as 20% at lease renewal,” he said.
“These hikes forced out independent operators and in came the big-box retailers that could absorb the higher rents. But as the diversity of shops declined and costs kept rising, even those larger tenants could no longer sustain it, and they closed too, leaving big vacant gaps along the street.”
The success of Chadstone shopping centre is thought to be taking foot traffic away from Chapel Street. Picture: Rebecca Michael
These days, Matt Lanigan believes that while some landlords remain inflexible, many have adjusted to market conditions and are working more collaboratively with tenants.
“I think exorbitant rents were more of a pre-COVID issue. There’s now greater flexibility, even if it’s not always at a price level operators would ideally like,” he said.
Significantly reduced and fluctuating foot traffic also remains a challenge for Chapel Street businesses, a lingering effect of the pandemic, as fashion retail shifts online and competition intensifies from major hubs like Chadstone Shopping Centre.
“It used to be, in both hospitality and retail, that foot traffic would cover your costs and your regular clientele was a bonus. Now if you don’t have a strong client base then you’ve got no chance of surviving,” said Mr Christakakis.
“For example, we had a shocking day yesterday, with very little business coming off the street. Fortunately, we have a very strong client base and so the day was saved by a businessman from Perth who regularly shops with us.”
Chapel Street Precinct Association general manager Matt Lanigan, who used to run the Lucky Penny coffee shop in Prahran. Picture: David Geraghty / The Australian
A street in transition
But as the strip continues to evolve, so too do the businesses shaping its future.
Mr Lanigan said the wellness sector has grown significantly over the past five years, with gyms, Pilates studios and wellness centres replacing many smaller boutiques that have moved to Armadale.
“There’s always going to be new operators coming in with different ways of doing business. There seems to be a growing focus on creating experiences, rather than simply selling products,” he said.
The proposed redevelopment of the Jam Factory. Picture: Supplied
This shift is being reinforced by a new wave of large-scale developments aimed at revitalising the strip.
At the centre of Chapel Street’s next chapter is the long-awaited redevelopment of the Jam Factory, a project now valued at up to $3.75 billion. The five-tower mixed-use precinct will deliver hundreds of apartments, hotels, offices and more than 18,000sqm of retail, alongside a state-of-the-art cinema, public plazas and laneway dining designed to reactivate the strip day and night.
Nearby, projects such as Cecil Place in Prahran - a $60 million mixed-use development – will also inject new life into the precinct, with plans for boutique retail, hospitality venues and commercial space aimed at attracting both operators and foot traffic back to the street.
“Chapel Street is the heartbeat of Stonnington - everything feeds off it. There’s always going to be new operators coming in and finding different ways of doing business,” Mr Lanigan said. “Smart operators will see the opportunity to ride the wave of these major developments, which are set to bring new investment and more people into the area.”
Fitzroy Street in St Kilda is an example of a high street that can be revitalised. Picture: realestate.com.au
While Mr Christakakis described the incoming mega-developments as “fantastic”, he is wary of history repeating itself.
“Mark my words, market reviews will be implemented again, and we’ll end up in the same cycle,” he said.
Mr Lanigan is more optimistic.
“All high streets go through transitional periods - it just takes time. Look at Fitzroy Street; that transformation took years," he said.
"I think Chapel Street will move a lot quicker. There’ll still be a couple of tough years ahead, but I’m confident it will be thriving again within three to five years.”
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