SOUTH KOREA. The Shilla Duty Free is set for a minimum US$325 million five-year boost to its top-line revenue after securing the Gimpo International Airport liquor & tobacco concession yesterday.
As reported, Shilla beat off competition from arch-rival Lotte Duty Free to secure the business. In related news, small & medium enterprise (SME) Duje Industrial Development Co outscored The Grand Duty Free to win the Cheongju International Airport duty free concession.
“The Shilla Duty Free has never returned a duty free licence before a concession period ends.”
A spokesman for The Shilla Duty Free told The Moodie Davitt Report, “Market consensus and analysts – not The Shilla Duty Free’s projection – expect the concession to generate sales of KRW60 billion (US$54 million) annually.”
Given Shilla’s expertise, buying power, brand and tour group relationships, and e-commerce excellence compared with predecessor, the SME City Duty Free, it seems likely that the retailer can grow the business well beyond that level given a fair wind in terms of inbound and outbound tourism.
Commenting on the contract victory, the spokesman said, “The Shilla Duty Free believes the company’s successful operations at Asian major hub airports were highly appreciated. At Incheon, Changi and Singapore, The Shilla Duty Free is operating airport duty free concessions simultaneously and successfully. In addition, The Shilla Duty Free has never returned a duty free licence before a concession period ends [an apparent reference to Lotte Duty Free having prematurely exited part of its Incheon International Airport Terminal 1 business earlier this year -Ed].
“Such a proven track history as a successful and responsible operator must have added extra credibility to The Shilla Duty Free’s proposal.”
Shilla will operate across 733.4sq m of space at Gimpo. Its business will be in competition with Lotte Duty Free, which holds the contract for cosmetics & fragrances plus an array of fashion, watches, accessories, souvenirs and food.
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