COMMENT
Now and Then... Distance brings us closer
A
special supplement published in
May 2000 focusing on the evolution of DFS Group in a tempestuous retail climate makes for interesting reading. With Asia markets still
reeling from the financial crisis two years prior, it was impressive to note DFS’ return to profit in 1999, having reduced its costs by a reported $200m. All the while, it had continued with a $350m storebuilding programme for its downtown Gallerias. As Managing Editor Doug Newhouse
noted at the time: “DFS knows that the good old days are long gone. It will have to fight a lot harder for its profits in the future as the price savings proposition becomes less of a factor within its main markets and stores. Falling domestic market tariffs and a much greater awareness among Asian consumers of pricing differentials in other continents will all contribute to a tougher environment for everyone.” DFS – like other operators in the US –
endured the September 11th 2001 terror attacks on travel and trade. There was also SARS in 2002/2003; and the global financial crisis of 2008, among other shockwaves. However, no operator, particularly one with as strong a presence in Asia as DFS, will have forecast the devastation caused by the new coronavirus (Covid-19). At the time the May edition of TRBusiness
went to press, the number of confirmed virus cases had surpassed three million worldwide and claimed the lives of more than 210,000 people (Source: John Hopkins University). ‘Unprecedented’ is a superlative avoided
at the best of times, but friends, colleagues and contacts of this publication have been using the term almost ubiquitously in their appraisal of the current predicament – and with good reason. For DFS, the travel retailer will exit its
long-held Changi Airport liquor & tobacco contract in early June as Lotte Duty Free assumes the lease. A Lotte source told TRBusiness that the tenancy, which covers 18 stores and 8,000sq m of retail space across all four terminals, will commence as agreed. Lotte will benefit from previously
102 TRBUSINESS
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DFS Group was the subject of a special edition supplement from The Duty Free Business in May 2000.
announced relief measures implemented by Changi Airport Group, including a 50% rebate on basic monthly rental. In its first quarter results, DFS parent company LVMH Moët Hennessy Louis Vuitton experienced a 17% drop in organic sales to €10.6bn/$11.5bn. The Selective Retailing division, which includes DFS, posted an even more dramatic 26% decline in organic revenue during the same period. According to LVMH: “DFS experienced
a significant decline in activity in most destinations as a result of the suspension of international travel.” While the short-term picture for duty free
is looking bleak at present, the medium- to long-term signs are certainly more encouraging. The Middle East and parts of Asia (China)
are already beginning to revive domestic air travel services. In turn, the resilience and ingenuity shown to date by stakeholders across travel retail as evidenced by our ‘Adapt & Survive’ Skype video series has been heartening. TRBusiness’ support during this painful time
extends firmly beyond the traditional reader and viewer base; despite social distancing protocol, the company’s mantra of ‘helping the industry grow’ has never before taken on such a powerful meaning. «
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MAY 2020
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