INDIA BUSINESS WORLD - NOVEMBER 16th - NOVEMBER 30th
- 2007
LVMH ARM BAGS MUMBAI DUTY-FREE RETAIL CONTRACT
MUMBAI International Airport (MIAL) has terminated contract for duty-free retail with the ITDCAldeasa combine and awarded it to DFS, a LVMH Moet Hennessy Louis Vuitton group company.
DFS, one of the largest airport retailers in the world, has won the deal paying a minimum guarantee of Rs 260 crore, about 60% lower than the original bidders, the ITDC-Aldeasa consortium.
Apart from the guaranteed amount, DFS also has a revenue share deal with MIAL, that is triggered if turnover crosses a certain amount, sources close to the deal said. DFS will be responsible for designing and building the shopping environment, sourcing a wide range of international luxury brands and developing a promotion strategy for duty-free shopping at the Chatrapati Shivaji International Airport (CSIA).
With the new agreement in place, duty-free operations, in India's largest international airport, are now expected to start from January 2008. They have been held up since June, as the earlier consortium failed to formalise the joint venture.
The ITDC-Aldeasa group had bid Rs 570 crore to bag the contract. Airport sources say the deal fell through primarily because they subsequently wanted to renegotiate it for a lower amount. MIAL was unwilling to do this because the concession was awarded after a global tender and renegotiating the deal would have meant scrapping the entire process.
Located in the International terminal 2C at CSIA, the duty-free shopping area will be spread across 24,541 square feet. Of this, 14,585 square feet will be at the departure level, 8,395 square feet at the arrival level and 1,560 square feet will be for storage. Announcing the award of the contract to DFS, MIAL managing director GV Sanjay Reddy said, "Duty free shopping is a significant component of passenger experience at any airport. We would like to provide passengers at CSIA a truly world-class shopping experience, across brands, product variety and price points."
The DFS Group is one of the world's leading luxury retailers and operates more than 150 shops at major airports in Asia Pacific and North America, including Singapore Changi, Hong Kong, Sydney, Auckland, New York JFK, San Francisco, Los Angeles and Honolulu.
|
