Duty Free Americas has renewed its core duty free contract – which includes nine locations – at Washington Dulles International Airport and Ronald Reagan Airport, following a public bid, which took place on 9 July.

 

DFA President Leon Falic told TRBusiness last month that it was opening a new Burberry store at Washington Dulles Airport, where the company was awarded an extension for an additional seven years. Speaking to Falic yesterday he confirmed that DFA had indeed won the contract and that it is in fact ‘very important’ to the retailer’s global business.

 

Duty Free Americas initially won the duty free concession contract for Washington in August 2003, which was scheduled to expire July 31, 2013. The Metropolitan Washington Airports Authority said that as a result of ‘increasing international enplanements’ it saw a need for an additional duty-free store. The contract was then extended to July 13, 2014 in 2011.

 

On 9 July, the Airports Authority held a public bid opening for the Minimum Annual Guarantee (MAG) for the contract – there were five price proposals submitted by DFA (Dulles Duty Free, LLC), Nuance Washington, LLC, Dufry Dulles National JV, World Duty Free Group and ATU Americas LLC.

 

The apparent high bidder was Dulles Duty Free, LLC, led by Duty Free Americas. The bids were expressed in dollars and cents per international enplanement. Based on 2013 international enplanements at Dulles and Reagan Dulles Duty Free, LLC’s bid of $3.7009 per enplanement is approximately $12m.

 

DFA will operate two duty free stores at Ronald Reagan Airport.

 

The contract includes operation of nine locations – seven at Washington Dulles International Airport and two at Ronald Reagan Washington National Airport. The contract expires on 31 December, 2021.

 

In 2013, the Minimum Annual Guarantee (MAG) was $3.7 million. The contractor paid the greater of the MAG or 20% of annual gross sales. Total revenue paid to the Authority in 2013 was $4.7m says the Metropolitan Washington Airports Authority (MWAA).

 

“The stores in both Airports will sell bonded perfumes, cosmetics, cigarettes, spirits and luxury items to international passengers. In addition, these stores will sell taxable, non-bonded merchandise to domestic passengers,” says MWAA.

 

Annual revenue will be the greater of 22% of total sales for the operations of Duty Free/Duty Paid concessions at the Airports, or the MAG. The MAG in the first contract year will be approximately $12.9m.

Concourse Concessions Inc will be Duty Free Americas’ partner in this contract and MWAA says Dulles Duty Free LLC has met the goal of 25% Airport Concessions Disadvantaged Business Enterprise (ACDBE).