TOP 10 OPERATORS 7: DFS GROUP
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DFS strengthens digital capabilities while Covid-19 pandemic continues
While DFS Group’s T Fondaco dei Tedeschi store in Venice helped the leading luxury travel retailer to offset challenging trading conditions in Hong Kong last year, it has been the company’s aggressive digital and social media strategy that has kept it afloat in 2020. Charlotte Turner reports.
VMH Moët Hennessy Louis Vuitton reported that leading luxury travel retailer DFS Group
demonstrated ‘strong resilience in 2019’ in the face of a slowdown in tourism in Hong Kong due to anti- government protests. This plagued the region in 2019 [as
explored in TRBusiness’ Top 10 Airports report and a more recent, exclusive interview with HKIA’s Executive Director, Commercial, Airport Authority Hong Kong - Ed]. TRBusiness estimates that DFS Group’s revenue grew by 2.2% in 2019 to $3.7bn. While the slowdown in Hong
Kong’s tourism represented a major challenge for DFS – which is headquartered in Hong Kong and runs T Galleria stores in Causeway Bay, Canton Road, Mong Kok and Tsim Sha Tsui East – it could at least take comfort from the positive performance of its T Fondaco Venice store last year. However, DFS did not have
much time to dwell on the positives as the impacts of coronavirus
OCTOBER 2020
(Covid-19) reverberated through the organisation from February 2020 onwards. This brought back painful memories of the 2003 SARS epidemic, particularly for DFS’ Hong Kong employees. As a direct result of store closures,
lockdowns and travel restrictions, LVMH registered a revenue decline of -15% to €10.6bn/$11.5bn in the first quarter of 2020, down 17% on an organic basis. The Selective Retailing division posted a more dramatic 26% decline in organic revenue during the same period.
Digital forges loyalty Unsurprisingly, DFS experienced a significant decline in activity in most destinations ‘as a result of the suspension of international travel’, said LVMH. In the second quarter of 2020, it was disclosed that a series of cost reduction measures had been undertaken by DFS, but that its digital strategy has strengthened the relationship with customers, particularly in China.
“Tencent has proven to be the perfect partner for DFS and we are delighted to have the opportunity to create content that attracts, engages and satisfies our discerning travelling customer within WeChat’s exciting and dynamic ecosystem.”
Zac Coughlin, Chief Financial Officer, DFS Group
TOP 10 OPERATORS 31
DFS has been able to significantly strengthen its digital capabilities in 2019 and 2020 for its Chinese customers and recently acquired a 22% stake in Shenzhen Duty
Above: DFS Group’s Macau Galaxy, Beauty T Galleria.
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