IS DUTY FREE
International Shoppes reports ‘mostly positive’ 2018 despite tense US-China trade relations
US travel retailer International Shoppes may have noticed a decrease in spend- per-passenger among its Chinese consumers in 2018, but this did not stop the company from enjoying a generally successful year. As Andrew Pentol discovers, there are plenty of reasons to be optimistic moving forward.
predicted 2018 would bring a small increase of +2% in Chinese visitors to the US. Assuming this growth materialised,
Chinese tourism arrivals for 2018 would have amounted to 3.2m. This would not be bad taking into account the political relationship between the two countries. Greenbaum comments: “Even
Above: Spend per pax among International Shoppes' Chinese consumers across all categories, including beauty, was down in 2018.
L
ast year was a mostly positive one for International Shoppes. However,
the brittle
relationship between the US and China due to the ongoing trade war, coupled with Chinese stocks entering bear-market territory seemingly impacted the purchasing appetite of Chinese consumers. Matthew Greenbaum, Vice
President International Shoppes tells TRBusiness: “The sentiment between the US and Chinese has not been great. They seemed to buy a little more conservatively than they have in the past. “This might not only be due to
the sentiment between the two countries, but also because the Chinese were in a bear market and not feeling as wealthy as they have been.”
Strength in numbers Last year, the National Travel & Tourism Office – part of the US department of commerce –
“It seems like there is a thaw and the sentiment of the Chinese nationals that are coming here very much follows the overall sentiment among the two countries.”
Matthew Greenbaum, Vice President, International Shoppes
18 TRBUSINESS
if spend-per-passenger was down, the overall take from the Chinese customer was up because the volume of passengers was so great.” At the time of writing, President
Trump and his Chinese counterpart Xi Jinping were close to finalising a trade deal between the world’s two largest economies. Should it materialise, this will not necessarily spell the end of the trade war but will certainly represent a huge step in helping to de-escalate tensions. “The situation seems to be
improving now,” according to Greenbaum. “The people are coming in droves, but the sentiment seems to be a little better. “It seems like there is a thaw
and the sentiment of the Chinese nationals that are coming here very much follows the overall sentiment among the two countries.” According to the latest tourism
statistics, the total number of visitors to New York reached 65.2m in 2018, of which 1.1m were Chinese. The year before, the city welcomed 1.04m Chinese tourists.
First YSL airport store Last year, International Shoppes completed a large-scale expansion of its New York John F. Kennedy International Airport Terminal 1 duty free store. It is now in the midst of renovating and expanding its Terminal 1 beauty
store. The shop moved out of the main Terminal 1 duty free area in 2017 and was given its own space. With the renovation/expansion set
for completion in time for the busy summer period, Greenbaum will be hoping the purchasing appetite of Chinese consumers is re-ignited. Outlining the main details of this
latest project, he explains: “We will be inserting six new beauty shop- in-shops from brands not previously present in the store and a Chanel boutique in that space.” In addition, International Shoppes
will open the first YSL airport store in the Americas at New York JFK Terminal 1. “We are really excited to be
working with the Kering Group to develop this 1,000sq ft space for a brand which is really on fire right now,” says Greenbaum. Reflecting on the significant
expansion of the Terminal 1 duty free store, where the beauty category was present before moving into its own space, Greenbaum says the outlet was totally renovated and completely upgraded. “This was so liquor, tobacco,
confection and luxury watches could grow to expand into the footprint beauty used to occupy. “The result has been a tremendous
increase in overall business and total upgrade of the terminal.” «
The liquor offer in the revamped International Shoppes main duty free store at New York JFK T1.
MARCH 2019
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