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Operator profle The market’s top players Travel retail Going global is on the wish list of many travel retailers in the race for pole position. BW Confdential analyzes the market’s top players by Tina Milton Dufry Group (WDF/Nuance) (25%), while the Americas accounts for 18% Sales full year 2014: CHF5.20bn ($5.52bn) and Asia and the Middle East 7% of sales. (Nuance/Dufry); WDFG: CHF2.56bn ($2.72bn) Dufry started to integrate WDF in August and Total: CHF: 7.76bn ($8.24bn) expects to generate savings of €100m over the Market share: 20% (including WDF); 24% in next 18 to 24 months through higher gross airport retailing margins and a company reorganization. P&C share in total sales: 28.3% (estimated The integration of both Nuance and WDF 2015—source: Vontobel Equity Research) will present a major challenge over the months Strategy: Following the World Duty Free ahead. In a report, Vontobel states: “Although (WDF) acquisition, Dufry is the clear leader we fully understand the long-term industrial in travel retail. The company will increase its logic behind the WDF transaction (being the market share in travel-retail from 14% to 20% clear global market leader) we see several (24% in airport retailing), and will be twice as risks in the short term as Dufry is in the midst Vontobel forecasts that 50% of the new Dufry big as DFS Group, which ranks number two, of integrating Nuance and WDF has started Group’s sales will come from Europe, followed according to Vontobel Equity Research. WDF integrating EU platforms [new organization, IT, by Latin America with 20%, North America is strong in the UK (44% of sales) and Spain supply chain].” with 18% and Asia/the Middle East with 12%. DFS Group plans to enter Europe put the travel retailer in Sales full year 2014: CHF4.60bn ($4.89bn) the spotlight last year. It secured the Fondaco dei Market share: 11% Tedeschi building on the Grand Canal in Venice P&C share in total sales: N/A in 2014 and in collaboration with the Benetton Strategy: LVMH-owned company DFS Group family holding company Edizione, the site will operates in 11 countries. In Asia, the climate has blend culture, events and retail. been challenging of late, with frst-half results While DFS Group’s frst steps in Europe are showing that DFS continues to be impacted important, the long-term aim is more about by currency volatility and the geopolitical spreading its appeal to a broader range of environment in Asia. nationalities and casting the net wider than the nationalities include Cambodia, where the travel Aside from the implementation of its T Galleria Chinese traveler it traditionally serves. Other new retailer plans to open its frst T Galleria by DFS by DFS concept across its downtown stores, DFS’ markets set to deepen the pool of its buying store at Siem Reap in early 2016. Lotte Duty Free free store in the Lotte City Hotel in June. Sales full year 2014: CHF3.75bn ($3.98bn) International expansion is high on the group’s Market share: 9% agenda and it has made strides in Indonesia at P&C share in total sales: N/A Soekarno-Hatta International airport, downtown Fragrance & cosmetics account for 37.7% of Jakarta, Singapore Changi, Guam and Kansai sales at the Lotte World Tower airports. Lotte plans to open a downtown store Strategy: Recent additions to its airport and in Tokyo and a downtown outlet in Bangkok downtown business on home turf include the next year. But the MERS crisis has seen many opening of Lotte World Tower in downtown visitors (notably Chinese) cancel trips to South Seoul in 2014, gains in the Seoul Incheon airport Korea, posing a major threat to business. The duty-free tender and a new Jeju downtown duty- situation is said to be improving. n n n November-December 2015 - N°24 - BW Confidential 101