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DFS Group Chief Operating Officer Michael Schriver: “We are excited and are looking forward to working with the airport over the next several weeks to finalise the concession” |
US. DFS is poised to retain its key duty free concession at Los Angeles International Airport (LAX), after being ranked number one bidder by Los Angeles World Airports (LAWA).
As reported, LAWA had invited bids from retailers to operate in excess of 37,000sq ft of commercial space across eight terminals at LAX. The largest, the Tom Bradley International Terminal (TBIT), comprises about 25,000sq ft in a major construction project that, crucially, will transfer the duty free area to a post-passenger security position.
The duty free contract at LAX has a term of ten years with the option to extend for up to three years through individual annual contracts. Categories include cosmetics, perfumes & fragrances, liquor, tobacco, electronics, fashion and luxury accessories.
As reported, bids for the vital US West Coast contract closed on 2 April after attracting a star-studded field believed to have included a joint venture between The Shilla Duty Free and Aer Rianta International; Dufry; Duty Free Americas; The Nuance Group; World Duty Free Group; Travel Retail USA (a venture led by Gebr Heinemann); Lotte Duty Free and DFS.
Approached by The Moodie Report for comment, DFS Chief Operating Officer Michael Schriver confirmed that DFS had been informed by LAWA that it was the number one-ranked bidder. “We are excited and are looking forward to working with the airport over the next several weeks to finalise the concession,” he said.
Another bidder, which had been notified of the result, told The Moodie Report: “We bid aggressively but it was always going to be tough to oust such a strong long-term incumbent.”
The news, which we emphasise is still subject to closure, completes an extraordinary few weeks for DFS. In May its duty free concession lease at New York John F. Kennedy International Airport Terminal 4 was extended by JFK International Air Terminal LLC (JFKIAT) for a further seven years, with a mutual option for a further three-year extension.
And last month, as revealed by The Moodie Report, DFS scored a stunning triple triumph by winning all three core category concessions at Hong Kong International Airport – a contest that generated even more competition than LAX.
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DFS has operated the duty free concession at Los Angeles International for many years |
LAX is the sixth-busiest airport in the world and the third largest in the US by passenger volume. Almost 62 million passengers travelled through the airport in 2011, including just over eight million international departing passengers.
Critically, the airport is the largest point of entry to the US for Asian passengers, who comprise up to one third of its international traffic (and a much higher proportion of duty free spending). With Chinese passenger numbers rising fast, the gateway takes on even greater retail significance, underlining DFS Group’s strong desire to retain one of its longest-term strongholds.
Duty free sales reached just under US$118 million last year but are likely to rise significantly, partly in the wake of increased Chinese traffic and partly due to an ambitious airport development programme.
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