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Travel retail Operator profle buoyed by recent contract wins at Incheon The Shilla Duty Free The company’s position has been further n n n Sales full year 2014: CHF3.0bn ($3.19bn) International at the beginning of 2015, where it Market share: 7% P&C share in total sales: 50% secured three key concession packages spanning Strategy: Shilla aims to become a global leader 20 outlets. Elsewhere in South Korea it won the in travel-retail and recent developments have demonstrated it means business. In March, Hotel at Yongsan I-Park mall in central Seoul through Shilla, owner of The Shilla Duty Free, acquired a HDC Shilla Duty Free, a joint venture between Shilla & Hyundai Development Company. 44% stake in infight duty free company DFASS contract to build a downtown duty-free shop Group for $105m. The move enables the travel Deals such as this have coincided with the retailer to collaborate on new and existing appointment of experienced industry executives duty-free contracts, expand infight concession such as former Nuance ceo Roberto Graziani as services and strengthen distribution agreements a board member. and improve its underlying proftability.” with brands. It will also signifcantly expand KDB Daewoo Securities Co Equity Analyst Aside from the deterioration in Chinese Shilla’s global footprint and position in the US, (Cosmetics, Hotel & Leisure, Fashion) Regina inbound traffc to Korea because of MERS, Latin America, the Caribbean, Africa, the Middle Hahm states the company is working to set itself sales increased by 20.5% to KRW766bn East and South East Asia. Hotel Shilla will have a apart from the competition. “In the long term, ($640m) year-on-year in the second quarter of call option to buy an additional 36% of DFASS we expect Hotel Shilla to enhance its global 2015. However, operating proft fell 5.4% to after fve years. reputation, strengthen its cost competitiveness, KRW31.7bn ($20m). Gebr Heinemann Major retail concession wins include Sydney Sales full year 2014: CHF2.52bn ($2.67bn) airport, fve additional sites in Tunisia (through its Market share: 6% joint venture with ATÜ) and Istanbul New airport P&C share in total sales: N/A (with partner Unifree Duty-Free). Heinemann Strategy: The travel retailer’s commitment to aims to expand to 90 concessions (from 78 at growth is evident with plans this year to invest April 2015) by 2020. It reports that 80% of its €130m (30% more than last year), mainly retail sales until at least 2020 have been secured in new concessions, a new offce building at by long-term concessions. Heinemann is more its Hamburg headquarters, e-commerce and focused on organic expansion and long-term improving logistics. On this note, the company partnerships than its more acquisitive rivals. has grown its capacity for the future, with twin Nevertheless, Heinemann has played its role in on the radar for future development and Asia logistics centres at Erlensee near Frankfurt (which consolidation, taking a 60% stake in Schiphol Pacifc surging in size, it’s one to watch with new opened in May 2014) and Hamburg-Allermöhe. Airport Retail. With Russia and the Americas concessions and a vast base for growth. Lagardère Travel Retail North American airport travel retailer Paradies for Sales full year 2014: CHF2.41bn ($2.56bn) $530m in cash from Freeman Spogli & Co, the (Lagardère Services) Paradies family and other shareholders. Paradies Market share: 6% operates in more than 76 airports in North P&C share in total sales: N/A America. Combining the activities of Lagardère Strategy: Passenger traffc, integration of Travel Retail in North America and Paradies acquisitions (including ADR Retail, Gerzon and would create the second-largest player in North Airest), product mix, store modernisation and America. The newly combined company would new concepts helped drive growth in 2014. have sales close to $800m and a presence in Progress has continued apace this year. LS around 100 airports. Travel Retail North America scooped a deal to Alongside these deals, investment in a new acquire the assets of Saveria USA in April, giving store concept has underlined its commitment airports with a pipeline of locations to follow. it access to JFK International airport terminal four. to the channel. The new Aelia Duty Free store Sales were forecast to increase between 5% Contracts were also defended at Luton and Nice concept, dubbed the next generation of outlets, and 10% per year to 2016. The company also airports. The company inked a deal to acquire was recently rolled out to Warsaw and Auckland has plans to make big acquisitions. 102 November-December 2015 - N°24 - BW Confidential