SINGAPORE. King Power Duty Free Company’s top bid for the fashionwear concession at Singapore Changi Airport terminal one, (The Moodie Report 16 January), has been confirmed as expected with the contract awarded today.
The Civil Aviation Authority of Singapore confirmed the award to The Moodie Report for a period of three years (with a two year option) from 1 April, 2004. “We have just made the award – all they now have to do is sign,” a spokesperson said.
The 500sq m shop will operate in the Departure/Transit Lounge Central in a prime location, alongside the fragrances and cosmetics area. The concession is currently operated by DFS Venture Singapore.
As revealed in our earlier report, there were two bidders. King Power Duty Free Company bid a total of S$15,130,863.60 (all following figures are in Singapore dollars) for the three-year contract ahead of DFS Venture’s $11,650,863.60. See full bid details below.
But the King Power was not a straightforward success. DFS fought hard to retain the contract, contending that it had the support of the key fashion brands. King Power’s bid had to go to a second level of approval, sometimes used by the CAAS, explaining the delay in the award. “It got very interesting behind the scenes to say the least,” one leading fashion supplier told The Moodie Report.
King Power’s ultimate success is a big boost to the Hong Kong retailer. Managing director Antares Cheng told The Moodie Report he was delighted with the concession gain. “Fashion is a vital category for us, which we are keen to develop strongly in our growing Asian operations,” he said. “To be back in such an excellent airport as Changi with such a flagship category is wonderful news.”
King Power general manager Sunil Tuli, who has long experience running Weitnauer’s (now Dufry) operations at Changi, and was closely involved with the bid, said: “I spent many years at Singapore Changi and it’s one of the best airports in the world. So I’m very happy to be associated with Singapore Changi again, especially in the fashion area, where we have particularly high expectations.”
Comment: As so often, the numbers only tell half the story. As revealed by The Moodie Report, Changi has a number of high profile bids out at the moment – fashionwear, confectionery and watches/jewellery – and each is being hotly fought out.
Nowhere was this more the case than in fashion where an effective “battle of the brands” has been played out behind the scenes with DFS. Having eventually secured the support of most of the fashion houses, King Power is understandably delighted to have re-secured a foothold at one of Asia’s most important airports – and key travel retail complexes.
Bid details: King Power’s bid was structured as follows:
– 35% of total monthly gross sales OR MMG of $350,000 for the 1st year from 1 April 2004 to 31 March 2005;
– MMG of $368,000 for the 2nd year from 1 April 2005 to 31 March 2006;
– MMG of $388,000 for the 3rd year from 1 April 2006 to 31 March 2007, whichever is higher.
DFS’ bid was as follows:
– MMG of $272,000 OR 25% of monthly gross sales for sales up to $1,300,000 PLUS 30% of monthly gross sales for sales exceeding $1,300,000, whichever is higher.
