ARI Joins Korean Retail Giant, The Shilla Duty Free, to Bid for Duty Free Contract at LAX
ARI, the international airport retail company owned by the DAA, has formed a joint venture with one of the largest retail companies in Korea, The Shilla Duty Free (Shilla), to bid for the duty free retail contract at Los Angeles International Airport (LAX).
LAX is currently the sixth busiest airport in the world and the third largest in the US by passenger volume. Close to 62 million passengers travelled through the airport in 2011, including just over eight million international departing passengers, each a potential duty free shopping customer. The airport is the largest point of entry to the US for Asian passengers, who comprise up to one third of its international traffic.
LAX operator, Los Angeles World Airports (LAWA), has invited bids from retailers to operate in excess of 37,000 sq feet of commercial space across eight terminals. The largest, the Tom Bradley International Terminal (TBIT), comprises nearly 25,000 square feet in a major construction project that will transfer the duty free area to a post passenger security position.
The duty free contract at LAX has a term of ten years with the option to extend for up to three years through individual annual contracts. Categories include cosmetics, perfumes & fragrances, liquor, tobacco, electronics, fashion and luxury accessories.
“We are really excited by our partnership with Shilla and what we believe is a very strong bid to operate at LAX,” said John Bolger, Regional Manager, ARI North America & Caribbean.
“Shilla, through its major downtown stores in Seoul and its operations at Incheon and other Korean airports, brings a unique insight into Asian customers, which comprise a significant and growing share of international passengers at LAX.”
“ARI has long-standing experience of successful partnership arrangements in many regions of the world, including the Middle East, Cyprus and India,” said Jay Cho, Shilla Senior Manager, Business Development Team. “Through its award winning operations in Montreal, where it successfully lobbied US customs to allow the transfer of duty free stores to the post security area, three other Canadian cities and Barbados, ARI also brings detailed knowledge of the North American passenger”.
With operations in twelve countries, annual managed sales in excess of €1 billion and more than 3,500 employees, ARI is amongst the world’s largest airport retailers. As lead partner in a local consortium, it secured its first contract in Asia in 2010 with the opening of duty free and duty paid stores at Delhi International Airport’s new Terminal 3. ARI opens its first stores in China next June, at Kunming International Airport in the South West of that country.
Shilla is the leading Asian travel retailer and has consistently grown its business in a market defined by a sophisticated and dynamic retail demand. Shilla is the hospitality arm of Samsung, the global Korean conglomerate.
Since launching a duty free concession at Seoul’s Incheon International Airport in 2008, Shilla has become the largest duty free retailer at the airport, generating $626 million in sales in 2011. Shilla’s retail leadership at the airport was the primary reason why Incheon’s duty free receipts now surpass those of any other airport worldwide.
The company’s duty free business, at downtown stores, airports and a very successful online channel, exceeded $1.5 billion in 2011 and has delivered a 45% compound annual growth rate over the past four years. Shilla opened the first airport Louis Vuitton store at Incheon in September 2011, which generates $300,000 in sales every day.
Vincent Wall 353 87 6860727