SOUTH KOREA. Shilla Duty Free has struck a landmark agreement to open the world’s first Louis Vuitton airport store, at Incheon International Airport.
The great French luxury brand has traditionally rejected the airport retailing channel – though it is present in downtown travel retail through selected Gallerias run by fellow LVMH subsidiary DFS, and through high-class Korean retailers such as Shilla and Lotte.
Shilla Duty Free parent company Hotel Shilla confirmed today that it would be signing an historic contract with LVMH Moët Hennessy Louis Vuitton regarding the Incheon store, which will open in the latter half of next year.
Shilla said: “Louis Vuitton’s opening of a store in Incheon International Airport is being considered as a monumental achievement in the global tourism industry. Over the years leading airports had proposed to Louis Vuitton to open a store, but the brand has rejected all proposals up to now.”
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Louis Vuitton will become the latest big-name addition to Incheon’s acclaimed Airstar Avenue retail offer |
Shilla said that the agreement followed a visit by LVMH Chairman Bernard Arnault to Incheon International Airport and its acclaimed “˜Airstar Avenue’ retail complex in April this year. “It is said that Louis Vuitton started reviewing the opening of an airport store at Incheon International Airport favorably after he [Arnault] witnessed the airport’s long-term potential for growth as well as for becoming a hub in Northeastern Asia covering Korea, China and Japan,” the company commented.
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Incheon International Airport President and CEO CW Lee: “Incheon will gain a competitive edge” |
Shilla claimed that the opening of the Louis Vuitton store will not only attract foreign tourists visiting or transiting through Korea but also entice luxury goods shoppers who would normally use Hong Kong, Singapore and Beijing airports to go through Incheon instead, “thereby contributing greatly to improving the nation’s tourism account”.
Shilla said: “Louis Vuitton is a preferred brand of shopping tourists from Asia, including China and Japan, and its powerful ability to attract visitors makes it a brand whose presence can influence the success or failure of an entire commercial facility.”
Incheon Airport currently operates a monthly total of 5,500 direct flights to 35 cities in China. The opening of the Louis Vuitton store is expected to accelerate the increase in the number of flights to China, Shilla said.
Incheon Airport President and CEO C.W. Lee said that the opening of the Louis Vuitton store would help establish Incheon as a central airport in Northeast Asia and as an Asian hub. Incheon will gain a competitive edge in its fight against Hong Kong, Singapore and Japan for attracting Chinese tourists and transit passengers, he said.
Incheon International Airport said it also expects the store opening to help achieve the airport’s goal to attract 10 million transit passengers by 2015. “The quality of an airport’s shopping facilities are an important factor in the decision-making process to choose a transit airport,” said the company.
The airport company and Shilla said that the Louis Vuitton store will confirm the luxurious image of Incheon International Airport, which has been recognised as the world’s best for the past five years by Airports Council International (ACI).
COMMENT: Given the archly competitive South Korean travel retail environment, Shilla’s mood of euphoria in today’s announcement comes as no surprise, writes Martin Moodie.
Duty free and travel retail shopping has been huge business in Korea since the first downtown stores were opened 30 years ago and big brands have always been at the forefront of the battle for market share.
They don’t come any bigger than Louis Vuitton, which has long enjoyed a strong presence in Seoul’s leading downtown duty free stores, where the sight of long queues snaking down the aisles outside the Vuitton boutiques is an integral element of the weekend shopping experience.
But that’s downtown. Companies such as Shilla and Lotte have also long coveted a Vuitton presence at the airport, a prize that despite many rumours to the contrary has thus far proved elusive. Today’s announcement, confirmed by Incheon International Airport, suggests the long wait is over and that LVMH Chairman Bernard Arnault has seen enough to convince himself of the merits of Shilla, Incheon and, in this case at least, the airport environment.
For Incheon International Airport, too, this deal is a stunning coup. Its management have been keen to leverage every single opportunity to develop Incheon’s hub status and the arrival of the great French luxury brand will be seen as a breakthrough moment.
The tale of Korean travel retail, never less than gripping over the past three decades, just became a whole lot more compelling.
ABOUT LOUIS VUITTON
Louis Vuitton is the world’s leading luxury brand. It placed top in UK-based market research company Millward Brown Optimor 2010 Top 100 Brands, with brand asset values estimated at US$19.8 billion, ahead of Hermès (US$8.46 billion) and Gucci (US$7.58 million).
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