NEWS/ANALYSIS


at Hong Kong International Airport where it won the confectionery contract and now runs eight shops over 1,000sq m of space. It also secured a new location at


Australia’s Gold Coast Airport and moved to increase its stake in joint venture DFZ in Malaysia to 15%. At Kuala Lumpur International


Airport, sales hit $50m in 2017 and were up by 40% in Q1 this year. In January, it began a 10-year tie-


up with JR/Duty Free at Israel’s Ben Gurion Airport in Tel Aviv, operating seven shops over 4,000sq m of space. Annual sales are predicted at


$400m this year, with the joint venture ranking as Heinemann’s third strongest sales location next to Istanbul Atatürk and Oslo Gardermoen Airports. At Atatürk, where Heinemann


operates with Unifree Duty Free as a 50% joint venture partner of Turkish travel retailer ATÜ Duty Free, passengers are slowly returning. Heinemann has earmarked


double-digit sales growth, with a sizeable €100m investment destined for its ongoing Istanbul New Airport concession, which it expects to open later this year. “We can say Turkey is back on


track, which is important for us as we had to replan our forecast for the new airport,” commented Raoul Spanger. “There’s an incredible amount


of work to do – we are preparing everything we can to follow this opening date [October].” TRBusiness asked Claus Heinemann


whether the firm is satisfied with retail developments made to date and confident that the vision it foresaw when it secured the 25-year contract in 2015 [the momentous concession spans 53,000sq m of retail space including 15,000sq m for duty free – Ed], would align, he said: “Turkish passenger figures, Turkish Airlines and Russians are coming back strongly. There is Dubai and Istanbul, the two major hubs between west and east. “The luxury brands are all positive


for the long-term project. Who knows how political developments will be, but we still believe very much in the strength of Turkey in general.” In an interesting admission, the


JUNE 2018


company revealed that the full-year sales target for Istanbul New Airport stands at €800m ($987m) in its first year of operation – an almost doubling of the current €472m ($582m) turnover figure it records at Istanbul Atatürk Airport. Additionally, the board revealed


that the forecast had been revised down from its initial target. Despite speculation, Heinemann would not be drawn on the original budget level for Istanbul New Airport’s first year of operation. Elsewhere, Heinemann this month


looks forward to the opening of Moscow Domodedovo Airport’s new terminal, where it will operate 7,000sq m of retail space.


L&T takes 57% share Referring back to the company’s annual results, liquor and tobacco took the greatest share of total sales (57%), followed by perfumes and cosmetics (32%), fashion and accessories (9%) and other categories/services (2%). Broken down by division, retail


operations account for the majority of the current business (78%), followed by distribution (21%) and rendered services (1%). On a regional basis, Europe


(including Germany) accounts for the largest share of sales (84%), followed by Asia and Asia Pacific (11%) and Rest of the World (5%). Unsurprisingly, airports took


the lion’s share of channel revenue (77%), followed by border shops (14%), cruise and ferries (4%), airlines and catering (2%) and other (3%). Like its retail competitors,


Heinemann encounters the same challenges related to global pricing and commitments from ‘globally- orientated suppliers’, but advances within its purchasing division has helped to anticipate new trends and brands to accommodate the passenger experience. Kay Spanger, outlined for


example how appeal for makeup has positioned it as a super-trend category, with Heinemann working tirelessly to implement novel and appealing design concepts. This is certainly the case with the


perpetual K-Beauty movement, with Heinemann sourcing Sulwhasoo to


TRBUSINESS 25


Subsidiary Travel Retail Vilnius landed a six-year contract extension at Vilnius International Airport in January.


“We have secured a big chunk of our business in the airline industry for the next five years.”


Peter Irion, Executive Director Distribution, Gebr. Heinemann


strengthen the skincare category.


Gate & easyJet renewals On the supply and distribution side, Heinemann recently struck key supply contract renewals with gateretail and easyJet. A five-year extension with


gateretail positions Heinemann as the exclusive perfumes & cosmetics supplier for all 18 of the onboard service provider’s carriers, with a non-exclusive agreement to supply other categories. Meanwhile, a five-year extension


with Ryanair allows Heinemann to cover Europe’s largest airline’s product offer in exclusivity. Irion told TRBusiness: “Gate is today


the leading retail concessionaire onboard 18 airlines and they want to grow further. With those two, we have secured a big chunk of our business in the airline industry for the next five years.” «


Below: The Executive Board address media representatives in a lively briefing.


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