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LEADING AMERICAS OPERATORS: DFS GROUP Will DFS seek to increase its presence at US airports?


As John F. Kennedy International Airport begins a $3.8 billion redevelopment project of Terminal 4, TRBusiness predicts that DFS Group will seek to maintain and even expand its presence there. However, as has been concluded by TRBusiness in recent months, it appears that the company is placing greater emphasis on its downtown presence following the exit of two major airport contracts (Changi and Hong Kong) in recent years and the opening of sprawling retail department stores in Europe. Charlotte Turner reports.


W


hile DFS Group was established in Hong Kong in 1960, the


company’s roots are just as deep in the US where it opened its first duty free store in 1962 (Honolulu). It was in the seventies that DFS began to rapidly expand its footprint, notably with its first store at San Francisco International Airport (SFO). Still in residence in San Francisco,


DFS also operates stores at LAX, JFK and Hawaii’s Daniel K. Inouye and Kahului International Airports. DFS also operates an impressive T Galleria in downtown Waikiki (Honolulu), where TRBusiness witnessed the company’s 50th anniversary celebrations in 2015. However, since then DFS has


witnessed many ups and downs, and has been exposed by declines in traffic from Asian tourists due to a variety of reasons. Most recently reports circulated that staff cuts had been made in Hawaii specifically. It was widely reported by local media that DFS Hawaii laid off 165 of its 660 employees in three locations across Hawaii’s islands, citing financial losses due to decreases in the international travel market (September 2019). Still, the company maintains


a dominant presence at US international hub airports. At SFO in particular, DFS will continue operating stores for another 10 years following the award of a 14-year extension at the end of 2017. While DFS continues to evolve its


offer at SFO – a duty free redesign was announced in 2018 – one of the biggest developments for DFS’ North American business will surely be in New York where a $3.8 billion redevelopment project is taking place between now and 2023 at John F Kennedy International Airport’s


MARCH 2020


(JFK) Terminal 4. As reported by TRBusiness, in


February the Port Authority of New York and New Jersey reached an agreement on key terms with terminal operators Delta Air Lines and JFK International Air Terminal (JFKIAT). As a result, the terminal will be significantly expanded with Delta consolidating operations there.


Off-airport focus Projects include a major concourse expansion, which will add 16 new gates, renovation of the existing concourses and roadway upgrades to improve vehicle access. The renovated terminal and concourses will feature ‘modern concessions’ and amenities welcoming travellers to New York. At present, Delta operates out of Terminal 4 and Terminal 2. The expansion will allow the consolidation of all its JFK operations into Terminal 4. TRBusiness expects that Martin


Matthews, Managing Director North America for DFS Group who replaced the outgoing Mark Sullivan in June last year, will be looking to lead the retailer’s strong case to maintain its existing presence


and increase it when construction completes in three years’ time. However, the company certainly


seems to be channelling investment into its off-airport T Galleria stores, choosing to open the hugely ambitious T Fondaco dei Tedeschi (Venice) in 2016, and announcing another equally ambitious project in Paris, La Samaritaine, slated for a 2020 opening. Considering that the retailer


ceased operating its stores at Hong Kong Airport in 2017 and announced it would be doing the same at Changi last year (to be enforced this year), there is certainly evidence to support DFS’ shift in business focus away from airport duty free in favour of its downtown stores. «


TRBusiness expects that Martin Matthews, Managing Director North America for DFS Group who replaced the outgoing Mark Sullivan in June last year, will be looking to lead the retailer’s strong case to maintain its existing presence and increase it when construction completes in three years’ time.


TRBusiness TRBUSINESS 39


Above: DFS store at JFK Airport T4.


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