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Travel retail Europe: regional analysis s There is a push towards premiumization in European travel retail, as seen in Nuance’s Haute Parfumerie niche fragrance concept “It also accounts for the impact of increasing shown a slight decline at Frankfurt in 2014. Russian and Asian passengers value fragrances geopolitical tension in Russia and Ukraine, as In addition, fragrances and cosmetics are and cosmetics more than Europeans, who show well as softer demand in Turkey and emerging underperforming levels achieved in other a preference for luxury accessories or fashion countries outside Europe,” he explains. product categories. brands. Last but not least, we are missing some Managing director purchasing and logistics Chinese customers and a strong consumer Discounting & politics take their toll Kay Spanger tells BW Confdential : “European group from Ukraine.” A comparably strong German economy has passengers judge the category differently Indeed, given recent political and economic UUST GOT BETTER given airports such as Frankfurt an advantage today—perfume has become a daily events, the market seems more dependent over European competitors. But concessionaire commodity in the consumer’s mind. In addition, on European traffc. “There may be a better the discounting situation [in the domestic economic situation across key countries such “ this makes our lives more diffcult. Nowadays, the depreciation of the ruble, a drop in spend as Italy and Spain, but with Russia being hit by market] is unfortunately getting worse and European passengers judge the category differently Dufry’s Nuance buy: the European impact today—perfume has become Aside from slightly better fgures coming out of Europe, the big news set to have a major impact on Now news headlines daily on www.bwconfidential.com a daily commodity in the the region (and the travel-retail industry as a whole) is Swiss travel retailer Dufry’s announcement consumer’s mind. In addition, that it would acquire The Nuance Group. All major news on the industry now published every day on our website Dufry says its acquisition of Nuance confrms its position as the worldwide leader in airport News headlines complement analysis and interviews in our electronic the discounting situation [in retailing with a global market share of 15%. For Europe, Dufry claims the deal will give it a leading publication and print magazine the domestic market] is getting position in the Mediterranean, which it calls the largest and most important tourist destination BW Confidential becomes a destination for keeping up-to-date with worse; this makes our lives in the world. Nuance has stores in Turkey, Malta and Portugal, which will complement Dufry’s what’s going on in the industry and staying ahead of the competition operations in eight countries, including Italy, Greece, Spain, Morocco and Egypt. more diffcult business to Sweden, as well as the UK, most notably at London Heathrow Airport. In Eastern Through the deal, Dufry will also become the preeminent travel retailer in Switzerland and expand ” Europe, Dufry will have a strong market presence in Russia, and add business in Bulgaria. The inside view on the international beauty industry The combined company’s Europe Middle East and Asia business will account for 46% of its Gebr Heinemann managing director purchasing and logistics Kay Spanger $5.56bn in sales. Fragrances and cosmetics emerges as the biggest product category for the combined company, representing 33% of sales. Gebr Heinemann, whose top-three markets The move will bolster both its buying power and economies of scale. However, the jury is still out The website - daily news are Norway, Turkey and Germany, reports on how this will impact suppliers. Some say not a lot will change, adding that the market is already The electronic publication - every two weeks that the fragrance and cosmetics category has quite concentrated, while others are wary about the purchasing power that Dufry will now wield. The print magazine - four times a year 74 September-October 2014 - N°19 - BW Confidential 220x142mm.indd 2 24/09/13 15:47