PORTUGAL. In big breaking news, VINCI Airports today finalised the acquisition of 51% of the share capital of Lojas Francas Portugal (LFP), Portugal’s airport retail leader. VINCI bought the controlling stake from TAG GER, a subsidiary of national airline TAP.
LFP currently operates 31 stores covering around 7,500sq m in seven of the ten Portuguese airports managed by VINCI Airports, including Lisbon Airport.
“With this acquisition, VINCI Airports reaffirms its ambition to drive creation of the new generation of airport retail” – Nicolas Notebaert, Chief Executive Officer of VINCI Concessions and Chairman of VINCI Airports
The company, founded in 1994, employs around 500 people and generated revenue of approximately €200 million in 2016. The remaining 49% of LFP’s capital is held by Dufry Group, the world’s leading travel retailer.
Traditional duty free shops (perfumes and cosmetics, tobacco, alcohol, food products) account for the lion’s share of LFP’s activity, VINCI noted. The retailer also sells fashion products, jewellery and accessories in dedicated stores under the Attitude brand, together with international branded products in exclusive boutiques under licensing contracts.
“The concept of vertical integration by airports into commercial activities is nothing new but for a multiple airport investor of this magnitude to make such a move is intriguing. Will VINCI stop here? Unlikely.” – Martin Moodie
The acquirer said: “This operation allows VINCI Airports to strengthen its expertise in airport retail. Through its management of 35 airports across the world, the Group already works regularly with its commercial partners to offer passengers a range of products meeting their expectation. In 2016, revenue from non-aviation activities, including airport retail, accounted for 25% of VINCI Airports’ consolidated revenue.”
VINCI Concessions Chief Executive Officer and VINCI Airports Chairman Nicolas Notebaert said: “With this acquisition, VINCI Airports reaffirms its ambition to drive creation of the new generation of airport retail. Backed by our expertise as an airport operator, we are keen to place our knowledge of the customer pathway at the service of an optimised shopping experience.”
COMMENT: VINCI’s rise and rise of recent times has been one of the talking points within the aviation sector, writes Martin Moodie. This acquisition underlines exactly how well the group understands the critical role of commercial revenues in funding its growth ambitions. With ‘skin in the game’, rather than just being the recipient of minimum annual guarantees or turnover-based percentages, VINCI clearly believes it is in a stronger position to drive upside in retail revenues, as well as delivering an enhanced consumer experience.
The concept of vertical integration by airports into commercial activities is nothing new but for a multiple airport investor of this magnitude to make such a move is intriguing. Will VINCI stop here? Unlikely. This is a very modern airport operator and investor that sees non-aeronautical activities as part of a holistic revenue base with traditional aviation revenues. Watch this space.
About VINCI Airports
VINCI Airports, a top five global player in the international airport sector, manages the development and operations of 35 airports: 13 in France, 10 in Portugal (including the hub of Lisbon), 3 in Cambodia, 2 in Japan, 6 in Dominican Republic and Santiago Airport in Chile.
In March 2017, VINCI Airports was awarded the concession of Salvador’s airport in Brazil. VINCI Airports’ network, served by more than 200 airlines, handled 132 million passengers in 2016.
VINCI Airports develops, finances, builds and operates airports, leveraging its investment capability, international network and know-how to optimise the management and performance of existing airport infrastructure, facility extensions and new construction. In 2016, its consolidated revenue amounted to €1.05 billion.
Also see www.vinci-airports.com
