TOP 5 ASIA OPERATORS: DFS GROUP


DFS powers on in Asia building on strong momentum last year


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Losing the Hong Kong Airport beauty tender in 2017 was a disappointment for DFS Group. However, this did not stop the travel retailer from pursuing various new campaigns and activations to achieve a strong performance, particularly in the second half of the year. This ensured it was well placed to come out all guns blazing in 2018. Andrew Pentol reports.


A


fter DFS Group lost out to The Shilla Duty Free in the much-coveted Hong Kong


International Airport beauty and accessories duty free tender last year, DFS suggested to TRBusiness it would start afresh in 2018 ‘from a very good financial situation’. DFS may not have bid on the


liquor and tobacco contract [which was ultimately won by the CDF-Lagardère Company Limited joint-venture] but losing out in the beauty and accessories tender – especially as it won all three contracts back in 2011 – must have been a bitter pill to swallow. If LVMH Selective Retailing 2017


results published in January and Q1 financials publicised more recently in April are anything to go by, the retailer is well placed to build on this apparent stronger financial position and increase profit in 2018. In 2017, the Selective Retailing business, which also includes Starboard Cruises and Sephora, recorded organic growth of +13%. Profits from recurring operations climbed +17% compared to 2016. In Q1 2018, the Selective Retailing


division reported organic growth of +9%. This was driven by an ‘excellent start to the year’ for DFS, whose contribution to the aforementioned 2017 and Q1 2018 organic growth figures must not be underestimated. LVMH said the improved


performance across DFS’ airport and downtown business in 2017 was driven by an improvement in Chinese tourist numbers to destinations where it operates. The trend seems to be continuing


LVMH added that DFS turned


a positive corner in 2017 thanks to more ‘buoyant markets’, especially in the second half of the year. The strong recovery in DFS’


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revenue, particularly in Hong Kong and Macau, was boosted by high impact marketing campaigns, continuous improvements in store assortments and digital offerings designed to better serve travellers. LVMH said at the time the 2017


results were published: “The ramp- up of new stores in Cambodia continued, while a fourth DFS Wines and Spirits store opened at Singapore Changi Airport, which also helped add to last year’s growth.” Throw into the mix an agreement


in 2018, with Chinese visitors to Macau, where DFS runs six T Galleria Beauty stores, accounting for 74.5% of total visitors in February (+37.3%).


MAY 2018


to debut at Kansai Airport in April 2017 and operate seven brand boutiques in T1, along with significant investments in its airport shops and downtown T Galleria stores and it is easy to see why there was cause for optimism. These significant operational


to build on its 2016 sales, which TRBusiness estimates declined to approximately $3.2bn from $3.5bn in 2015, as is continued to suffer from losses in Hong Kong and Macau. Given market improvements and


the continued strong performance from downtown, DFS will likewise expect to continue that momentum throughout 2018.


www.trbusiness.com/subscriptions Wilcy Wong,


Managing Director Singapore and India, DFS Group


TRBUSINESS 47


“We are excited to grow our relationship with SCC and look forward to providing a broader retail experience to travellers at the ferry terminals.”


developments in 2017 and removal of a significant loss-making source at the end of the year (Hong Kong) suggested DFS Group’s prediction of a strong financial position come the start of 2018 was justifiable. DFS Group would have expected


Above: The opening of its store at the new Changi Airport T4 last November was a major highlight.


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