CHINA (HONG KONG/MACAU). DFS Group will open additional T Gallerias in both Hong Kong and Macau before the end of the year, as well as complete the ambitious refurbishment of its T Galleria on Hong Kong’s Canton Road by early 2020.
Both the new stores are dedicated to the burgeoning beauty category. In September, the luxury travel retailer will open T Galleria Beauty by DFS Wynn Palace, its seventh store in Macau.
In November DFS will open its fourth downtown duty free store in Hong Kong when T Galleria Beauty by DFS Moko opens in Kowloon’s Mongkok district.
Elsewhere in Kowloon, DFS is in the process of refurbishing its T Galleria on Canton Road. The store remains open during the work, but the full refit is set to be completed early next year.
In what is a deeply challenging time for the Hong Kong retail market, DFS’s decision to invest underlines the LVMH/Robert Miller-owned company’s long-term faith in the special administrative region and of a market rebound.
As reported, nearly three months of protests have shaken the previously stable luxury retail market in Hong Kong. The Hong Kong Retail Management Association has predicted a double-digit drop in year-on-year retail sales for July and August. Protesters have twice brought a halt to flights at Hong Kong International Airport and this week threatened further disruption there, despite an Airport Authority Hong Kong injunction barring such activities.
Confirmation from DFS of the openings and refurbishment also confirm the retailer’s desire to invest in the downtown duty free sector, a channel that comes without the same risks as high-profile, short-term airport concessions.
As exclusively revealed by The Moodie Davitt Report, DFS chose not to bid for the liquor & tobacco concession it has held at Singapore Changi Airport since 1980, billing it as “not a financially viable option” in the wake of changing regulations in Singapore and wider geopolitical uncertainty. That followed the exit by DFS from its loss-making multi-concession contract at Hong Kong International Airport (HKIA) after an open tender in 2016/17 (there, DFS chose not to bid on liquor & tobacco and failed to retain the perfumes & cosmetics business). While impacting the top-line, the loss of the HKIA contract boosted profits considerably.
