DFS Group to pull out of Changi Airport
After 38 years, the luxury travel retailer will make way for a new duty-free player
After 38 years at Changi Airport, the DFS Group will soon be pulling out. Its duty-free stores will close next June, when its lease expires.
The luxury travel retailer, Changi's biggest and oldest tenant, has confirmed that it did not bid for a new liquor and tobacco concession.
A DFS spokesman told The Straits Times yesterday that about 500 people are directly employed to service DFS' liquor and tobacco concession operations at Changi Airport.
She said DFS Group will work closely with the new operator, expected to be announced in November, to ensure a smooth handover.
Staff had the option of working with the new operator or with other operators in the airport community.
Some may also be offered deployment at other DFS locations in Singapore.
"Regardless of our decision to withdraw from the liquor and tobacco concession at Changi, we remain fully committed to our future in Singapore, where we have operated for nearly 40 years," the spokesman said.
The group's luxury concessions at Changi, in Scotts Road, and its Singapore Cruise Centre business will operate as usual.
In a statement issued to the media, DFS Group chairman and chief executive officer Ed Brennan said: "Our decision not to bid was based on our unique understanding of the business environment as the current operator of this concession at Changi.
"Specifically, changing regulations concerning the sale of liquor and tobacco, against a global context of geopolitical uncertainty, meant that staying in Changi was not a financially viable option."
DFS manages 18 stores at the airport, occupying more than 8,000 sq m of retail space across the four terminals.
Retail experts said DFS Group's decision to pull out was likely impacted by Singapore's tighter rules on liquor consumption, more travellers shopping online and new competition posed by Jewel Changi Airport.
Since April 1, the alcohol duty-free concession has been cut from three litres to two litres.
This is the second international airport from which the group has pulled its duty-free stores in the last two years. DFS Group exited Hong Kong International Airport in 2017.
Despite these exits, the group has done well in the last year. Its majority owner LVMH Moet Hennessy Louis Vuitton reported "solid progress" in the first half of 2019.
The Straits Times understands that three firms have submitted bids for the liquor and tobacco concession at Changi Airport. They are The Shilla Duty Free of South Korea, which operates the perfume and cosmetics stores at Changi, another Korean firm, Lotte Duty Free, and Gebr Heinemann of Germany.
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