NEW ZEALAND. LS travel retail and Aer Rianta International (ARI) have been awarded the two duty free concessions at Auckland Airport, replacing incumbents JR/Duty Free and DFS Group effective 1 July.
As reported the tender was a five-way race between the incumbents, LS travel retail of France, ARI of Ireland and Lotte Duty Free from South Korea. However JR/Duty Free withdrew from the bidding process on Monday, “prompted by the high level of uncertainty and a very onerous contract, which together took the level of risk too high” [we’ll examine the reasons behind that withdrawal via our Moodie Live real-time Blog over coming hours].
 |
“There will be many new duty free brands and retail concepts, including a number of world firsts“ |
Richard Barker General Manager of Retail and Commercial Auckland Airport |
Auckland Airport General Manager of Retail and Commercial Richard Barker said, “Following the receipt of five strong bids, Auckland Airport is delighted to announce that LS Travel Retail Pacific and Aer Rianta International, two of the world’s most innovative duty free operators, have been selected.”
“LS Travel and Aer Rianta will start operating at Auckland Airport from 1 July 2015 and their licence will be for at least seven years. They will provide our passengers with shopping experiences unrivalled anywhere else in the country.”
“The selection of these two operators helps ensure that our passengers will be able to choose from a wide range of products and services that represent the best of New Zealand and the world. There will be many new duty free brands and retail concepts, including a number of world firsts.”
“Travellers will start to see the positive impact of the two new operators on 1 July this year, however, the biggest changes will come once we have opened our new international departure area.”
“The appointment of LS Travel and Aer Rianta will also result in a significant expansion of our online retail channel, including “˜click and collect’ which provides passengers with the option of buying online and collecting their tax-free and duty free purchases when next travelling internationally.”
“Importantly, we expect the appointment of LS Travel and Aer Rianta will eventually result in even more employment opportunities at the airport.”
“Auckland Airport is focused on strategically growing its duty free and retail business and providing travellers with a great shopping and travelling experience. The selection of LS Travel and Aer Rianta will allow us to do just that. Both operators have proven themselves overseas to be driven and innovative in achieving strong, customer-focused, growth in airport duty free retail.”
“As a result of the duty free tender, and other changes in specialty stores, we expect our earnings before interest, tax and depreciation in the 2016 financial year to increase by an additional $5 million.”
 |
“This is a wonderful opportunity for Air Rianta to enter a new partnership with an ambitious, forward-looking airport “ |
Jack Macgowan CEO Aer Rianta International |
“The selection of LS Travel and Aer Rianta will enable our duty free shopping to become one of the best in the world, and shows our ongoing commitment to our passengers. This announcement is also an important step as we implement our 30-year vision to deliver Auckland and New Zealand’s “˜airport of the future’, ” he said.
LS Travel Retail Pacific Chief Executive Officer Matthieu Mercier said, “The win signals an exciting new chapter for both LS Travel Retail Pacific and Auckland Airport. LS will boost the airport’s duty free offer with innovative ideas, and we will leverage our extensive vendor relationships and global experience by offering a wide range of big name brands in perfume & cosmetics, local wine and liquor to name a few. Our goal now is to make it happen and to create a fantastic duty free experience that exceeds passenger expectations, and I believe that our vision for Auckland Airport will achieve this and more.”
Moments after the award was announced Aer Rianta International Chief Executive Jack MacGowan told The Moodie Report: “We are absolutely proud as punch at having won this. It’s a big, big deal for us. Everyone here is excited.” [We’ll bring you an extensive interview with him soon].
 |
“Our goal now is to make it happen and to create a fantastic duty free experience that exceeds passenger expectations“ |
Matthieu Mercier Chief Executive Officer LS Travel Retail Pacific |
Earlier MacGowan said in a statement: “This is a wonderful opportunity for Air Rianta to enter a new partnership with an ambitious, forward-looking airport that is seeking to collaborate with a global duty free operator to enhance the retail experience of international passengers at Auckland Airport.
“From the moment we held our initial conversations with the team at Auckland, we recognised a shared vision about placing the passenger at the heart of the airport retail experience and about enhancing that experience with an exciting ‘Best of New Zealand and the World’ retail offer. This will include our concept stores such as the award-winning Whisky Collection and our innovative new confectionery concept Candy Cloud.”
“ARI will bring to Auckland its global experience of successful airport retail operations and airport partnerships. Drawing on our wealth of international expertise we will deliver a top quality travel retail experience that will delight New Zealanders and international visitors to the country.”
In its own release after the announcement, LS travel retail said that “the latest version of the Aelia Duty Free concept, tailored specifically for Auckland Airport, will be rolled out for the first time in the region. The offer is based on the three pillars of the renewed Aelia Duty Free concept: ‘Here and Nowhere Else’, ‘Art of the Gift’ and ‘Facilitation and Care’. LS travel retail Pacific’s vision to Intrigue, Experience and Indulge will form the backbone to this strategy.”
Mercier added: “The alignment, at the very early stages of the process between our vision for a renewed retail experience at Auckland Airport, enhanced by the new Aelia Duty Free concept and the airport’s ambition, has been nothing short of amazing. Our duty free teams have been able to give this vision both a strong element of local flavour and an experiential dimension which clearly contributed to this success. To achieve this result, we have been able to mobilise the right balance of local expertise and understanding of the specificities of the New Zealand market together with a strong involvement of the LS duty free and specialty experts across Europe and Asia Pacific.”
LS travel retail Pacific’s Duty Free General Manager Ivo Favotto said: “We are delighted to be extending our duty free presence in New Zealand to the country’s main gateway at Auckland. Auckland is a fabulous city in a fabulous country and we worked hard to build an offer that honoured the uniqueness of both the city and the country, as well as its spirit of adventure. Our concept for Auckland is based on delivering unique experiences to travellers through Auckland Airport.
“We plan to bring a number of world firsts to Auckland, as well as a range of unique experiences and a plenitude of new brands and product categories. Watch this space. I must also commend Auckland Airport and their retail team for running one of the most fair and collaborative of tender processes. We found the team great to work with (and not just because we won!), and we look forward excitedly to a long partnership with them.”
Barker added: “Finally, I would like to thank both DFS and JR Retail, our current duty free operators, for their strong proposals, for being great business partners and for the excellent service they have provided to our passengers over many years.”
 |
“This decision [to withdraw from the bid] was prompted by the high level of uncertainty and a very onerous contract, which together took the level of risk too high“ |
Garry Stock Chairman JR/Duty Free |
JR/Duty Free comments on withdrawal
Commenting on JR/Duty Free’s late withdrawal from the contest, Chairman Garry Stock said: “It is important to note that in the final stages of negotiation, on Monday of this week, JR/Duty Free informed Auckland Airport that it was withdrawing from the process.
“This decision was prompted by the high level of uncertainty and a very onerous contract, which together took the level of risk too high.
“It was a sad and difficult decision, given the huge impact JR/Duty Free has had on the duty free landscape at Auckland Airport, and the close positive working relationship we have shared with the Management and Operational Teams of Auckland Airport.”
“We wish the new incumbents LS travel retail and ARI every success as they develop their business in Auckland.
“We thank all our staff at Auckland for their outstanding service to our customers in building a business which drove duty free at Auckland Airport to the highest of standards.
“JR/Duty Free remains committed to our remaining businesses in New Zealand at Christchurch and Wellington and to growth in the region as opportunities present themselves
Asked for comment by The Moodie Report, DFS said: “DFS is proud to have operated stores in Auckland for over 25 years, including at Auckland Airport, and we would like to thank all our loyal staff at Auckland Airport as well as our local partners for their support and commitment to DFS over so many years.
“While we are disappointed to have lost our bid to retain our operation of one of two competing duty free concessions at Auckland airport, we look forward to continuing to provide a luxury retail experience for travelers who visit our downtown T Galleria store located in the iconic Auckland Customhouse. This jewel of a store will undergo an exciting refurbishment over the next two years. We congratulate LS travel retail and Aer Rianta International on their successful bids, and wish them every success in their endeavours.”
Pressed for further reaction to the contract loss, DFS told The Moodie Report: “We enter every bid process representing the best proposition that we can. While we are disappointed to have lost the bid, we believe our offer was based on a strong brand portfolio, impactful marketing activities and an outstanding architectural concept, combined with a realistic view of the market opportunity.”
