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SINGAPORE/SOUTH KOREA. In a major coup, Korean travel retailer Lotte Duty Free has been awarded the fashionwear concession at Singapore Changi Airport Terminal 1.
The concession runs from 1 October 2012 to 30 September 2015 with an optional two-year extension. It covers 304sq m of retail space.
Lotte Duty Free told The Moodie Report that it proposes to offer 11 brands, including Bvlgari, Montblanc and other similarly prestigious brands.
“Lotte expects to achieve more than US$60 million sales revenue during the concession period (with optional years inclusive),” a senior source said.
The T1 business is currently run by The Valiram Group which, as reported, decided to exit the concession early.
That prompted Changi Airport Group to invite interested companies to participate in a Direct Approach Exercise for the concession. The approach is believed to have sparked the interest of several travel retailers, with interest likely to have been shown by LS travel retail, DFS, WDF, Nuance, Heinemann, The Shilla Duty Free and others.
Lotte told The Moodie Report: “It seems that Changi Airport Group has highly evaluated Lotte’s duty free business knowhow, expertise and the ability to introduce strong brands to the busiest terminal in Singapore.
“We believe we now have established a solid foothold in the global duty free market.”
As reported, Lotte Duty Free last month opened its first store at Changi Airport, underlining its international ambitions. Lotte is the first Korean travel retailer to open at the Singapore gateway.
The 80sq m store sells Cheong Kwan Jang (Korean red ginseng) and Donginbi (red ginseng cosmetics). It is Lotte Duty Free’s second overseas store, following the recent opening at Jakarta Airport in Indonesia.
COMMENT: This is a big one for Lotte Duty Free. The company has made no secret of its ambitions to be a global travel retail force but this is its first major contract victory in one of the world’s leading airports.
The Korean travel retailer has been thwarted before in its efforts to land big concessions at Changi (last time round it outbid the winner, DFS, for liquor & tobacco but still lost), Sydney Airport and Hong Kong International Airport (where DFS is poised to secure all three concessions after the recent tender). But those disappointments will have receded with today’s announcement, which represents a key concession in a key location.
According to The Moodie Report Research, Lotte is already the world’s number four travel retailer by sales with turnover of US$2.5 billion in 2011. Largely that position has been generated by its powerhouse presence in its home market, both on-airport and downtown. Internationalisation is key to growth and the company has just laid down an important marker.
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Lotte Duty Free made its Changi AIrport debut with this store in late May |
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