Dufry acquires Latinoamericana Duty Free interests in Mexico; strikes deal to operate at Italian railway stations – 22/10/09
Source: ©The Moodie Report
By Dermot Davitt
MEXICO. Dufry has signed a contract to acquire the duty free assets and contracts of Latinoamericana Duty Free (LDF) in Mexico. The deal includes operations at Mexico City, Acapulco, Guadalajara, Leon, Monterrey, Los Cabos, Ixtapa and Puerto Vallarta airports.
Through this transaction Dufry will almost double its turnover in Mexico and reinforce its role as the leading travel retailer in the country. The combination of LDF’s duty free business with Dufry’s existing local operations will allow substantial synergies across all of the group’s functions in Mexico, said Dufry.
"The acquisition of LDF’s duty free operations will substantially strengthen our position as the leading operator in the Mexican travel retail market"
Chief Executive Officer
In locations where both Dufry and LDF have duty free operations, Dufry will re-organise the business to capture additional sales potential, for example by introducing the Hudson concept to Mexico. It will also use the opportunity to renegotiate its concession fees as a new larger entity, it said. Overall, the transaction will add 24 shops with more than 3,700sq m of retail space and around 200 employees.
LDF offers a full assortment of duty free products ranging from tobacco and spirits to perfumes & cosmetics and confectionery.
In other Dufry news, the company has signed an 18-year contract with Grandi Stazioni to operate convenience stores at Italy’s 13 largest railway stations, including the main stations in Milan, Rome, Turin and Bologna, which are important hubs for domestic and international long-distance travellers and service up to 150 million passengers per year. Dufry will drive the growth of the Hudson brand through the stations.
Dufry will take over existing shops with a total retail area of 915sq m and subsequently refurbish and expand the number of shops to 41 and the retail space to 1,900sq m.
Grandi Stazioni SpA is majority-owned by Ferrovie dello Stato and is the real estate operator of Italy's 13 largest railway stations as well as a number of other major European stations.
“We are very pleased with the new contracts," said Dufry CEO Julián Díaz. "The newly established presence in the railway stations provides the critical mass for Hudson in Europe and at the same time it complements Dufry’s activities in Italian airports.
“With the new business Dufry strengthens its leading position as travel retailer in the Italian market, combining a strong duty free business with a pre-eminent position in the duty paid convenience store segment in both airports and long-distance train stations. The latter is a very interesting opportunity to leverage and further roll out Dufry’s duty paid expertise based on our in-depth understanding of travellers’ behaviour. The new contract allows us to enter the business right away and to develop the retail space by implementing our concept.
“As for the agreement in Mexico, the transaction is a clear example of the type of consolidation that will continue going forward. The acquisition of LDF’s duty free operations will substantially strengthen our position as the leading operator in the Mexican travel retail market and we will nearly double our turnover in Mexico. At the same time, it allows us to fully restructure our Mexican operations and to create a significant amount of synergies. Last but not least, it will provide us the opportunity to introduce the Hudson business model also in Mexico.”
MORE STORIES ON DUFRY
Cash generation, debt reduction prove key as Dufry boosts first-half profitability – 02/09/09
The Moodie Reportfolio: Lotte Shopping Co is the best performer in July as stock markets rally – 06/08/09
Hudson Group joint venture captures latest news and books contracts at Newark International Airport – 03/08/09
Dufry captures fashion concessions at Nice Airport T2 – 31/07/09