SINGAPORE. Luxury Ventures, operated by Malaysia’s respected Valiram Group, has been awarded the Singapore Changi Airport Terminal Two fashionwear concession, heading off strong competition from incumbent DFS Group and Nuance-Watson (Singapore).
The contract commences on 1 January and runs until 31 December 2009.
The high profile award follows a lengthy delay since we reported the bid details on 21 August. That suggests intense behind the scenes negotiations in the contest for one of Changi’s key contracts.
The award will be a big disappointment to DFS, considered by many to be the leading fashion travel retailer in Asia Pacific. The company also lost its T1 fashion contract to King Power (HK) last time that concession went to bid. However it still runs a number of specialist outlets at Changi.
Valiram Group has been in airport retail since 1996 and already operates at Changi (Bally boutiques in both terminals and a Mercedes Benz outlet in T2).
It describes itself as “˜Malaysia’s leading luxury goods retailer’, representing brands such as Coach, Dunhill, Godiva, Hermès, Montblanc and Swiss Watch Gallery at Kuala Lumpur International Airport as well as enjoying a powerful domestic market presence. In Singapore it has its Bally and Mercedes Benz airport business plus Coach and Jimmy Choo (the hugely popular upscale footwear brand) in the local market.
The group was founded in Malaysia in 1935 by the late Utumal Valiram and remains in family hands. Valiram is the largest importer, stockist and distributors of textile raw materials in Malaysia and diversified into airport travel retail in 1996.
The company certainly bid aggressively to wrest the contract from DFS. In a complex and ambitious offer Luxury Ventures offered 30% of total monthly gross sales for all ‘non-sale’ merchandise, excluding watches and jewellery sold within the individual branded boutiques; 10% of total monthly gross sales for all watches and jewellery sold within the individual branded boutique; 10% of total monthly gross sales for all ‘sale’ merchandise; [‘non-sale’ merchandise is defined as any merchandise sold at full tag price and below a -20% discount; ‘sale’ merchandise is defined as any merchandise with a -20% or higher discount on the tag price] or a minimum monthly guaranteed payment as follows:
Year 1 – S$1,200,000;
Year 2 – S$1,250,000
Year 3 – S$1,300,026 whichever is higher.
DFS Venture Singapore offered 35% of the total monthly gross sales or a minimum monthly guaranteed payment of S$980,000 per month (US$624,000 at current exchange rates) whichever is higher.
Nuance-Watson (Singapore) offered 30% of the total monthly gross sales or a minimum monthly guaranteed payment of S$760,000pm plus 15% on incremental monthly gross sales in excess of S$2.8 million for Year 1, Year 2 and Year 3, plus 10% on incremental monthly gross sales in excess of S$2.1 million but less than or equal to S$2.8 million for Year 2 and Year 3 only, whichever is higher.
MORE STORIES ON SINGAPORE CHANGI AIRPORT
Changi authority calls tenders for souvenir shops and T3 landside retail consultancy – 30/10/06
DFS and Esprit capture Changi mid-price fashionwear concessions – 10/10/06
Singapore Changi tops Business Traveller poll for duty free shopping – 25/09/06
Big bid helps Risis beats big names in Singapore Changi brand name shop tender – 22/09/06
