NEWS/ANALYSIS: LOTTE DUTY FREE/ CHANGI


Lotte Duty Free made to wait on L&T shop openings as Changi tenure begins


make the concession a success to this end? At press time, all these


were moot points. Fortunately, Singapore has already started easing its Covid-19 ‘circuit breaker’ measures as part of a three-stage plan to ensure safety. Lotte will eventually present


The South Korean duty free powerhouse officially began its six-year liquor and tobacco duty free contract at Singapore Changi Airport on 9 June. However, the current lack of shopping at the terminals due to Covid-19 means sales will be funnelled through iShopChangi.com to begin. Luke Barras-Hill reports.


Above: Lotte Duty Free will renovate its shops in phases, beginning with construction work at five stores in arrivals and departures at Terminal's 1 and 3. Pictured is an artist's impression of a store at the arrivals hall.


T


he inauguration of Lotte Duty Free’s newly acquired liquor and tobacco duty free


licence at Singapore Changi Airport on Tuesday 9 June was likely to have been a more mooted affair due to coronavirus (Covid-19) restrictions. Dubbed an ‘electrifying moment’


for the South Korean travel retail giant when it pipped close rival The Shilla Duty Free and Gebr. Heinemann to the six-year contract last year [running until 8 June 2026 and covering 18 L&T stores over an 8,000sq m footprint across all four terminals – Ed], the official ‘commencement’ on 9 June – at least in publicity terms – was something of an anti-climax. Lotte and Changi Airport Group (CAG) issued a short statement on


Unfortunately, both parties did not respond to requests to share further thoughts on plans for a hugely strategic concession in Asia at a time of unrivalled turmoil; it is worth remembering that DFS Group had operated the business at Changi for more than 35 years.


TRBusiness 24 TRBUSINESS


the day itself in which they provided a reminder of the agreement, while outlining a rung of novelties that consumers could expect to see in the future. Unfortunately, both parties did not


respond to requests from TRBusiness to share further thoughts on plans for a hugely strategic concession in Asia at a time of unrivalled turmoil; it is worth remembering that DFS Group had operated the business for more than 35 years. As such, a number of important


questions remain unanswered. Will Lotte look to open all its physical shops at the same time when conditions permit? Will the openings be phased? Have new rental concession terms been struck with CAG or will Lotte receive the existing 50% rebate on basic monthly rental for tenants? In addition, is the emergence


of so-called travel ‘special lanes’ in Singapore to other ASEAN destinations likely to hasten the likelihood of a solid enough return in passengers to justify shop openings in the near term? How does the airport and travel retailer intend to


more than 3,000 tax and duty free wines and spirits at its shops, but will first sell merchandise on CAG’s iShopChangi.com web shop.


Three-stage renovation The portfolio will feature special and limited-edition whiskies and cognacs; exclusive products to Changi Airport; a dedicated collection of Asian spirits with brands from Singapore and Korea; plus a growing array of non-alcoholic beverages. The shops will boasts a design


concept that integrates elements of nature inspired by Changi’s natural gardens. Inside the stores, travellers will benefit from the latest technologies and unique concepts such as a specialised cognac brand boutique; immersive experience zones dedicated to whisky, gin and wines; and a high-tech tasting bar. Shop renovations will take place in


three stages, beginning in Terminals 1 and 3. For the uninitiated, Lotte took


over the L&T concession from DFS Group, which vacated its licence on Monday 8 June. The LVMH-owned travel retailer


relinquished the chance to extend its contract for a further two years beginning from 9 April 2020, agreed in December 2019, instead opting to lengthen its tenancy by two months. DFS was expected to contest the


subsequent tender triggered by its withdrawal, but the company decided not to participate, citing concerns over the financial viability of remaining at Changi amid changing liquor & tobacco regulations and a context of geopolitical uncertainty. «


JULY 2020


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