The store will compete with longtime men's fashion retailers Harrolds and Henry Bucks, both of which have premises on Melbourne's premium retail strip Collins Street.

Harrolds, based at 101 Collins, boasts clothing from Tom Ford, Saint Laurent and Balenciaga while Henry Bucks recently revamped 750 square metres over two levels at 320 Collins for its luxury goods range.

Masons owner Marco Siracusa, a former employee of Harrolds with 20 years' experience in the industry, said the new 430-square-metre store at 167 Flinders Lane would have a clubby character defined by whisky-tasting sessions and a full-service shopping environment.

"We'll be fitting it out this year to open early next year," Mr Siracusa said.

The store will showcase clothing styles from luxury streetwear to elegant suiting in brands not yet available in Australia sourced from Italy, Paris and Japan.

"There's room for more luxury menswear because there's not as much competition for it," he said.

Masons will open in the ground level of an historic five-storey building purchased in 2010 by Alan and Carol Schwartz, members of the wealthy Besen family, who control investment fund Trawalla Group.

The menswear outfit will take a 10-year lease on a space that abuts Hosier Lane in a deal negotiated by Colliers International's Ben Tremellen and Cam Taranto.

Mr Tremellen said Masons was following in the footsteps of other notable luxury outlets Chanel and Bang & Olufsen, which have also set up shop on Flinders Lane.

International consumers used to account for around 70 per cent of luxury retail sales in Australia, but over the past five years the local market has grown steadily, he said.

Melbourne has seen an explosion over the past five years of offshore luxury retailers like Ermenegildo Zegna, Giorgio Armani and Paul Smith setting up shop.

Others, like Salvatore Ferragamo and Dior Homme, were still looking to establish standalone stores in or around Collins Street, Mr Taranto said.

Collins Street has seen a string of luxury flagship deals this year with Omega opening its first-to-market store at 179 Collins, Cartier a new flagship at No. 90, Bang & Olufsen opened on the corner of Russell Street and Flinders Lane, and Chopard and Van Cleef & Arpels are in 101 Collins.

The latest retails sales figures released on Tuesday show clothing sales fell again, down 1.4 per cent in May after a downwardly revised fall of 1.5 per cent in April.

Luxury retailers generally weather bumps in the retail market better than others.

The retail sales results were consistent with "anecdotes of poor winter clothing sales as a result of the warmest autumn on record", ANZ head researcher Felicity Emmett said.