Vogue editor Kirstie Clements said the Australian fashion industry was "under threat" and many middle-market designers would not survive the year.
"I think we will be looking at a radically different (much smaller) fashion industry in a year's time," Clements said.
"The game is going to change so radically: just look at what happened when (Spanish clothing retailer) Zara opened two weeks ago and people were lining up at the door - and there are still queues around the block for those clothes.
"Zara has got that point of being on trend and at a lower price point, and a lot of Australian designers in the middle ground are going to have to lift their game if they want to compete, or get out."Clements's comments follow this week's Australian Fashion Week when dozens of international and local clothing buyers flocked to Sydney for 57 runway shows.
One look that was common on the catwalks was the thigh-high split, which featured either on the side, the back or in twin lines down the front of long flowing skirts and dresses by such designers as Zimmermann, Alex Perry, Karla Spetic, Fernando Frisoni, Dion Lee and Yeojin Bae.
Other dominant global trends from the spring-summer 2012 collections, which will appear in Australian shops in August, were high necklines, contrast vertical lines, colour blocking, cut-outs and loads of decorative zippers.
Clements and Simon Lock, founder of Australian Fashion Week, said that in some cases it was the sameness of design that was impeding the growth of the local fashion industry.
"People want to come to fashion week and find things that are different to what they see in Europe and North America," Lock said.
But there were some bright moments during the week for Clements, who said the stand-out collections were by Toni Maticevski, Lover, Zimmermann, Lisa Ho and Therese Rawsthorne.
Maticevski's nature-inspired couture gowns and ready-to-wear collection presented yesterday even drew the first standing ovation for the week.
"He is one of Australia's major players," Clements said. "And I would suggest that (his) was show of the week."