DFS Venture Singapore has reached an agreement with Changi Airport Group (CAG) not to proceed with the two-year extension of its liquor and tobacco concession at Changi Airport which was announced last December.

The retailer will instead participate in a new tender for the concession which is due to be launched on 4 June 2019.

In the meantime, CAG and DFS have agreed to extend the current DFS liquor and tobacco tenancy by two months until 8 June 2020.

TRBusiness has reached out to DFS to learn more about the reasoning behind the decision not to extend this key liquor and tobacco contract at Changi Airport and why it has decided to participate in the new tender.

INTERESTING TIMING

The timing of the announcement is particularly surprising given the retailer only revealed its commitment to investing in the concession last December.

Covering 18 stores, the new tender will be spread over 8,000sq m of retail space across the airport’s four terminals. The contract will run for six years, from 9 June 2020 to 8 June 2026 and the concession will serve more than 66m travellers passing through the airport annually.

It also presents a ‘unique opportunity’ to work with an airport retail manager, recognised for its strong support for partners, according to CAG.

Interested parties are invited to attend a compulsory tender briefing and site visit scheduled for 25 June 2019. The deadline for submissions is 5 August 2019.

DFS’ luxury concessions at Changi Airport, T Galleria by DFS, Singapore operation and Singapore Cruise Center business are not part of the liquor and tobacco concession and unaffected by the new tender.

On announcing the contract extension last year,  Robert Calzadilla, DFS Group Region President Asia South said the retailer looked forward to finding new ways to excite and inspire its travelling customers by offering the very best wines and spirits accompanied by exceptional concepts and activations.

But according to statement from Ed Brennan, Chairman and Chief Executive Officer, DFS Group seen by TRBusiness this morning (29 May), the decision not to go ahead with the extension was because its investment plans for the airport required “a longer period to fully realise their impact.”

The statement added: “DFS’ liquor and tobacco operations are recognised by customers, brand partners and industry peers as being among the very best in travel retail. We will continue to operate at Changi under the current concession until June 2020 and look forward to many more years of serving our travelling customers in Singapore.”

STRONG PARTNER REQUIRED

Meanwhile, CAG has revealed it is seeking a strong partner with retail concepts to augment the passenger experience for the L&T concession.

The company said: “From store design and product range, to in-store activations and e-commerce strategy, the retailer should put forth a robust and compelling proposal, leveraging new technologies and innovations, to elevate travel retail at Changi.”

Lim Peck Hoon, Executive Vice President Commercial, Changi Airport Group (left) remarked:  “We are excited to hear from the market and look forward to new retail concepts to bring the liquor and tobacco concession to new heights.

“Changi is fully committed to growing with our concession partners through impactful innovation and effective collaboration. There will be a wealth of opportunities for the L&T partner to showcase its offerings to Changi’s global audience, delivering revolutionary best-in-class retail experiences, to build and grow its business.”