LEADING ASIA PACIFIC OPERATORS: LAGARDÈRE ASIA PACIFIC “So, if you’re a brand and you The House of Hennessy boutique at HKIA.
“If you’re a brand and you already have three or four stores in the city, what’s going to deliver a better return on investment? A fifth door in that city in yet another mall, which might not work or might take years to gain traction, or do you go for the airport where you have guaranteed traffic and exposure to people from all over China?”
Eudes Fabre, Lagardère Travel Retail
already have three or four stores in the city, what’s going to deliver a better return on investment? A fifth door in that city in yet another mall, which might not work or might take years to gain traction, or do you go for the airport where you have guaranteed traffic and exposure to people from all over China?”
Downtown sales dilution Fabre says brands that entered the big international airports in China ‘right at the beginning’ have played the game expertly. “High-end brands that got into
There are many nice malls with similar brands over and over. In the second-tier or smaller airports there’s less of an offer downtown, but there’s still a thirst for these brands.” Fabre says there are ‘almost too
many malls downtown’ in many areas in China.
Shanghai Hongqiao and Beijing understood the real value of these airports. By being in these high- volume locations, they knew they could reach out to people all over China without having to open more and more downtown doors with declining productivity.” Fabre insists that Lagardère is
currently in talks with a big supply partner, which is in the process of trying to convince its stakeholders that its next door ought to be in domestic travel retail, rather than downtown. “Because the door downtown
will take away from your downtown market,” explains Fabre. “It will probably be less successful than the ones you already have and it will probably impact the ones that you already have diluted. “The airport most likely will
not be dilutive and it is highly likely that it will mean incremental sales, but most importantly, incremental visibility.” Although visibility is a key
motivation for many brands opening a duty paid store at an airport, sales can also be higher than many expect. “It’s hard work and we have to
invest a lot in customer service and loyalty, CRM, logistics, but our commercial performances have nothing to envy from downtown. “Some of our travel retail doors
are actually more productive per square metre than the brand’s flagships downtown. Obviously, we are comparing apples and oranges, here… They are big flagships; we have tiny stores, but the sales per square metre is higher in our stores. “So, the potential of this channel
is certainly there and with some brands, we actually perform better in duty paid than we do in duty free (outside of China).” «
Above: A timeline illustrating Lagardère Travel Retail’s Chinese evolution. Lagardère TR awarded new ADL DF and F&B concessions
Lagardère Travel Retail picked up new duty free and international F&B concessions at Adelaide Airport in March. The new nine-year concession will
more than double the existing retail space for duty free and F&B and bring new concepts to the airport. As part of the major terminal
redevelopment at Adelaide Airport, Lagardère Travel Retail will open Aelia Duty Free stores in arrivals and departures. It will also open a flagship bar and café
62 TRBUSINESS
in departures called Hills Kitchen & Bar. The openings will be staggered
over the next two years. Spanning over 1,700sq m of retail space in the international terminal, the new offerings will present the best of the South Australian region and best international and global brands. They will also showcase the best of the
South Australian region, together with the best national and international global brands. Przemyslaw Lesniak, CEO, Lagardère
Travel Retail Pacific says the company has enjoyed a successful partnership with Adelaide Airport since 1987 and that the win is a significant milestone for the group. He said: “The trusting partnership
is strong and together with Adelaide airport’s vision to bring an innovative and unique retail experience to showcase the best of Southern Australia, we look forward to delivering exactly that to travellers through Adelaide Airport in the major terminal redevelopment.”
MAY 2019
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