EGYPT. Gebr Heinemann and its Egyptian partners topped the bidding after offers were opened for the duty free concession at Sharm el-Sheikh International Airport Terminal 2 on Monday. The German company confirmed its victory to The Moodie Report, noting that it partnered with local players Global Brands (led by the respected industry family, the Toulans) and Egypt Free Shops Co (EFSCO). The five-year concession will begin in late summer 2014.
The winning bid was made by a new entity, Heinemann Egypt, in which Gebr Heinemann is majority shareholder (60%), with Global Brands/Toulan Family and EFSCO each controlling 20%.
Dufry is the incumbent travel retailer at T2.
Gebr Heinemann Director Business Development Jens Degner said: “We are very happy and are looking forward to the new operation.The Egyptian market is well known to Gebr Heinemann. Through more than 20 years distribution experience in the market we gained extensive knowledge about customers’ needs and purchase habits and will know continue this experience with our first retail business.”
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How Gebr Heinemann is planning the design of its stores at Sharm el-Sheikh T2 |
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In Departures Heinemann Egypt will operate three stores. A 773sq m core category unit will offer a wide choice of international and local merchandise across spirits, wines, tobacco and confectionery.
A further 87sq m shop will offer Egyptian products with a 28sq m accessories outlet also opening.
There will also be a 143sq m Arrivals store featuring the main core categories.
The retailer said its design will evoke “desert and marine landscapes” with a special Regionals Market among the highlights. The main customer nationalities are British, German and Italian, said Gebr Heinemann.
The tender was conducted by Egyptian Airports Company. The revenue share from all bidders was equalised at 37.5%. In what a source close to the bidding described as the “MAG auction” (minimum annual guarantee), round one saw Cairo Duty Free, Aer Rianta International-Middle East and The Nuance Group drop out.
Dufry was next to follow, having offered a US$8.5 million MAG.
The last three bidders were Egyptair, Flemingo and Gebr Heinemann. Egyptair exited at US$9.21 million, followed by Flemingo, as the German company prevailed after a process said to have taken around three hours.
Attention now turns to the duty free auction at Hurghada Airport later this week. There, the incumbents are Egypt Free Shops Co and Egyptair Duty Free Shops, with competition set to come from the other players that also contested Sharm el-Sheikh T2.
An auction for duty free at Sharm el-Sheikh T1, due to take place on Tuesday, has been postponed, probably until next month.
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The duty free concession at Sharm el-Sheikh Airport attracted a strong field of seven bidders |
