TOP 10 OPERATORS 7: DFS GROUP
7 I
DFS exits Changi L&T concession and focuses on downtown stores
DFS Group’s announcement of its intention to exit its liquor and tobacco concession in 2020 dominated headlines back in August, but the decision was not taken ‘lightly’ said DFS CEO, Ed Brennan. Charlotte Turner and Andrew Pentol report on an eventful 18 months for the luxury goods retailer.
n August of this year, DFS Group announced that it would be withdrawing from its liquor and
tobacco concession at Singapore Changi Airport in June 2020. The news came as a shock to many
in the industry; especially those who remember when DFS first won the concession back in the ‘80s. It was especially surprising,
considering that it was only in December of last year that Changi Airport Group (CAG) revealed DFS would be extending its liquor and tobacco concession at the airport for two years starting from 2020. The extended agreement, covering 8,000sq m of retail space across all four terminals was expected to run from 9 April 2020 to 8 April 2022. However, the long-standing
incumbent decided not to proceed with the two-year extension, but did agree with CAG to extend the current tenancy by just two months until 8 June 2020. At the time, DFS intended to
participate in the new CAG tender for the 18-store concession, which
OCTOBER 2019
was launched on 4 June 2019, but then decided against this. The submission deadline for the
six-year contract (9 June 2020 to 8 June 2026) was on 26 August, having been extended from 6 August to give retailers more time to deliver ‘robust and compelling proposals.’ It is important to note that DFS’
luxury concessions at Singapore Changi, as well as its T Galleria by DFS and Singapore Cruise Center businesses are unaffected by its decision to withdraw from the L&T concession.
‘Not financially viable’ A statement from Ed Brennan, DFS Group Chairman and Chief Executive Officer seen by TRBusiness said the decision not to bid was based on the retailer’s ‘unique understanding’ of the business environment as the current concessionaire. He said: “Specifically, changing
regulations concerning the sale of liquor and tobacco, against a global context of geopolitical uncertainty, meant that staying in Changi was not
a financially viable option. “Although this decision is the right
one for our business, it was not taken lightly. DFS has held the concession at Changi Airport since 1980 and during this time we have exceeded all expectations for what travel retail can offer in an airport environment. We are proud of our achievements and deeply appreciative of the efforts of many talented people who have contributed to our success.” He added: “We sincerely thank the
Changi Airport Group for their past support and extend our best wishes
“Specifically, changing regulations concerning the sale of liquor and tobacco, against a global context of geopolitical uncertainty, meant that staying in Changi was not a financially viable option.”
Ed Brennan, CEO, DFS Group
TOP 10 OPERATORS 53
Above: DFS Group’s Macau Galaxy, T Galleria.
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