French travel retail giant Aelia achieved record sales of E.608m ($773m) in 2008, up by almost 12% compared to the same period in 2007, but Chairman and CEO Jean-Baptiste Morin says there are challenging times

ahead.

Speaking to TREND earlier this month, he said that the market is difficult to predict at present, as he explained: ‘We are almost living on a week-by-week basis trying to see how things are evolving. I don't believe that anyone can seriously pretend to forecast strong numbers with regards to 2009. I am not going to put a number on the table.’

Having said that, Morin says he is pleased with the 2008 results: ‘We have had a fairly strong 2008. It was a good year for us overall. Our growth was more than double-digit in an environment where traffic was flat. We had very substantial growth in our spend per head in airports overall. It has also been very, very efficient from that standpoint.’

He continued: ‘We are benefiting from the JV investments that we made in 2007 and 2008 in refurbishing and extending our commercial square footage in France, but also extending in Poland and elsewhere. We have invested a lot in Paris and Marseille. Now we are harvesting the fruits of those investments. That is a good thing for us.’

Like many other operations, Morin says that Aelia started to see a significant slowing of its sales across the board in the fourth quarter of 2008 and while the operator is still ahead of last year in overall numbers, he says the margin is reducing.

‘We will see what the coming months bring. It is definitely a very challenging situation.’

He added that Aelia's declining sales numbers have been partially compensated by the improvements achieved in average transaction values, alongside the company's decision to extend the range on offer in its Paris airports. He said: ‘ In particular, we invested a lot in enhancing the offer in perfumes, cosmetics and fragrances. In terms of offerings in the liquor area we extended the ranges, because we now have larger square footage in our retail unit.’

Morin says he is also very pleased that Aelia has continued to invest in its Paris airports' stores over the last few years, along with its partner in SDA – A?roports de Paris.

‘Thank God we made these investments in the last years, because today if we had to commit that sort of money in the current circumstances it would probably be very difficult. But we have done those investments and now we are managing those units to make them more profitable and valuable for us.’

As a result, Aelia is probably in better shape than many other retailers. Morin added: ‘We are happy to be part of a group that is in good financial health. Aelia is facing no real pressures in that respect. When sales go down because the traffic numbers go down we clearly have to be more careful about how we spend our money.

‘We are going to be more careful about the way that we invest, costs and overhead management. We have to make plans to save some money because that is the environment that we are in. Potentially I don't know that this will affect our ability to invest in new tenders. We will continue to invest in new business opportunities.’

[A major interview with Jean-Baptiste Morin will appear in the March edition of The Travel Retail Business-Ed].