GVA set for upgrade; Lagardère contract extended

By Luke Barras-hill |

Aelia Duty Free’s first eco-responsible store across its global network measures approximately 70sq m.

Geneva International Airport (GVA) has confirmed it will embark on an important project to upgrade its main terminal, which houses an 800sq m Aelia Duty Free store in the departures hall.

The main terminal is more than 50 years old, having opened in 1968, with the works aimed at renovating the entire area.

In addition, TRBusiness can reveal that Lagardère Travel Retail’s duty free contract with the airport will now run to 2026 after it was handed an extension to its existing concession agreement of just over two years on account of Pandemic-related disruption.

It is gathered that the airport’s other commercial partners have also received extensions on their leases, though this publication is not aware of the specific terms.

Lagardere Travel Retail had secured a five-year deal to operate seven duty free shops at the Swiss airport in 2017 [the company operates fashion concessions under a separate contract – Ed].

EAST WING ‘WELL RECEIVED’

The developments emerged as Lagardère Travel Retail, as reported, unveiled its first eco-conscious shop and an associated pop-up space at GVA’s new 520m-long East Wing yesterday (see below for more detail on the store concept).

The new Aelia Duty Free eco-store situated in Geneva Airport’s new 520-metre long East Wing conforms to a requirement for a minimum ratio of 75% natural light.

The East Wing, a showcase of eco-friendly design, architecture, and technology, opened in December after being delayed due to Covid-19.

It features a high level of thermal insulation through, among other components, high-performance triple-glazed facades and 7,000sq m of solar panels via 3,400 photovoltaic panels that generate electricity.

André Schneider, Chief Executive Officer, GVA says the reaction from passengers to date has been favourable.

“In general, it has been very positively received from passengers because we have been able to replace quite an old installation that was initially temporary, from 1975,” he told TRBusiness.

Owing to its technologically advanced footprint, the first four weeks meant some adjustment, he explains, but passengers are now appreciating the building.

“It also increased our capacity in passport control, which was – even during the crisis – a big issue not just here but at many other airports,” he continued.

André Schneider, Chief Executive, Geneva Airport.

“We have addressed the full needs of this East Wing, which is at the exit of the Schengen area plus the departure halls for intercontinental or out-of-Schengen flights. We have fully optimised flows and have a very advanced system for heating and cooling. These things are working well but need to be fully tested and adapted.

“This building offers all the amenities you expect in a normal building by using much less energy and generating more energy than it uses.”

The cost of bringing the East Wing to life was around CHF 330 million/$359 million as part of a wider investment in the East Wing sector totalling CHF 610 million.

“This included the rebuild of surrounding infrastructure to support the East Wing building. We’ve put in a lot of investment to make it extremely energy efficient so it is accessible to everyone,” said Schneider.

“Geneva Airport is very constrained in space, which reinforces that we need to think everything through. This is an important investment.”

He says that while investments to improve the ecological footprints of airports might initially cost more, the payback comes in the long-term and ultimately contributes towards ‘building back better’ in the bigger fight against climate change.

While the East Wing building began welcoming passengers in December, the health situation complicated the plan for an official inauguration.

“We have to do it now in an operational East Wing – the initial inauguration was with one flight,” said Schneider. “Now, we have 30-50 flights a day. We are looking at different dates, but it will be more towards summer.”

The Paris-headquartered travel retailer’s new pilot project at the East Wing spans around 100sq m, which includes the sustainability-focused Aelia Duty Free store and an accompanying pop-up devised in association with the United Nations’ 17 Sustainable Development Goals (UN SDGs).

Tatiana Valovaya, Director General of the United Nations office at Geneva, was present at the pop-up opening, where she made an address to media and officials.

Travellers visiting the pop-up can pen their ideas on how to contribute towards a healthier planet, with Valovaya, Schneider and Frédéric Chevalier, Regional COO and Member of the Executive Committee at Lagardère Travel Retail, posing for a photo opportunity following the opening by adding their thoughts on tackling the global challenges we all face.

Favarger, Lindt, Caran d’Ache, Cailler and other Swiss-made brands take prime positions within the pop-up area.

The UN SDGs pop-up will run for six months before becoming a permanent Aelia Duty Free merchandising fixture.

More eco-conscious Aelia Duty Free shops are expected in the future, but these are not under proposal at the moment and, in any case, it is understood that any future stores would not adopt a ‘copy-paste’ approach from the site in GVA.

However, while the concept remains an experiment in Geneva, TRBusiness gathers that Aelia is looking towards the end of 2023 to recreate from scratch a more flexible, adjustable and digital blueprint for the face of its duty free shops fascia.

In opening the new space, Lagardère Travel Retail says it has ‘turned theory into action’ in collaboration with partner GVA by converting Aelia Duty Free’s circularity, from the materials used in the shop fit-out to the merchandise sold within.

L-R: Frédéric Chevalier, Regional COO, Lagardère Travel Retail joins André Schneider, CEO, Geneva Airport for the traditional ribbon-cutting.

It has committed to reaching a 40% reduction in the carbon footprint of furniture and point of sale materials, tracked through the ‘Eco-logic carbon calculator’ from French manufacturer Media 6.

The calculator is used to set emissions targets while managing the life cycle of the store, including its resource efficiency and waste management.

“There is no restart that is not sustainable, economically speaking, and would not integrate any CSR component, especially on the environmental part,” stated Frédéric Chevalier, Regional COO and Member of the Executive Committee at Lagardère Travel Retail, who highlighted the strength of the mutually beneficial partnership with GVA and the UN.

ECO-AELIA: PLANTING THE SEED

Lucio Rossetto, Chief Business Officer and Member of the Executive Committee at Lagardère Travel Retail, told TRBusiness: “We are planting a seed to experiment and see what direction we want to take, both in terms of how we’ve built the store and the kind of products we put in.

“Most importantly, this is done with our partners – the airport and the city [of Geneva]. I think this is part of our DNA and the way we want to seek sustainability, not just something to be developed internally.

“We see ourselves as instrumental in realising the sustainability agenda of our landlords, clients, brands and local community and this is something distinctive for Lagardere.

“The second element of distinctiveness is being local, meaning working with a local institution. The UN is a local institution for Geneva that is also working with local producers to have the right products.”

Lagardère Travel Retail’s ‘We Care, We Do’ approach commits to supporting responsible buying choices by offering a more transparent and sustainable selection of instore products.

Inside, shoppers will encounter a considered selection of skus, many of which offer ESG certifications, accreditations or recognition.

The assortment curation and other elements of the store’s conception is aligned to the group’s ‘Planet. Ethics. People. Social’ (PEPS) corporate ESG strategy.

Asked how the company intends to hold itself to account to achieve this in the face of what are increasingly shifting and discerning consumer demands, Rossetto continued: “It’s a big challenge. We need to harmonise a lot of different needs, sometimes conflicting. At the end, it will be the consumer that decides, but it is our responsibility to give a choice. We are here to push for a wider, more-conscious choice, giving information and the opportunity to brands to display their sustainability profile and agendas.”

Through the ‘We Care, We Do’ approach, Lagardere Travel Retail is encouraging a transparent and sustainable selection of in-store goods, with or without certifications.

WIDENING THE LISTING CRITERIA

Swiss-made brands and products are at the heart of the new Aelia Duty Free eco-store.

Geneva-founded Caran d’Ache, purveyor of drawing and writing instruments, is already a prominent fixture within the Aelia Duty Free Geneva offer but is occupying a high-visibility, albeit temporary, space within the UN SDG pop-up area.

Isabel Clerc-Gippet, Director, International Sales, Marketing and Communications, Caran d’Ache said: “When Lagardère Travel Retail approached us on this project, we were already involved in developing [UN] SDGs activity, but we were at the early stages so we thought instead of doing it on our own, it made sense to do it with Lagardère and Geneva [Airport]. It was very coherent.”

Stéphanie Page, EVP Concepts, Design & Construction, Lagardère Travel Retail, said the very specific Aelia Duty Free project at GVA was conceived pre-pandemic, with the idea picked up again just over 12 months ago.

She spoke in more detail about the sustainability criteria used to shape the assortment, such as product packaging.

“Initially, we had a list of criteria aiming at making a selection of products based only on certification (i.e. Ecocert, organic etc.). We then said maybe we can open the doors a bit to the products that the brands can propose to us, for which they have the credentials, and structure ourselves internally within the core merchant and fashion teams with people in charge of checking these credentials.

“[The brands] can propose to use any product that comply with our criteria of selection – based on the four [PEPS] pillars. We intend to rollout this programme more during the second half of this year as we are refining our pillars.”

GVA handled just shy of six million (5.92m) passengers in 2021, up 5.8% on 2020, though 67% down on 2019.

The operator acknowledges that it will suffer another significant loss over the past financial year, albeit a dampened one versus 2020.

“The light is at the end of the tunnel,” added Pascal Le Droff, CEO, Switzerland at Lagardère Travel Retail, who says the company was 30% down last year versus 2019 before the pandemic.

Between March to May 2020, all of Aelia Duty Free’s shops at Geneva Airport were non-operational.

In the context of yet more uncertainty caused by the developing Ukraine crisis, together with the continued impact of the health situation on international traveller numbers, a -20% result in full-year 2022 at this point would be an acceptable scenario, hears TRBusiness.

Aelia Duty Free’s shops at Geneva Airport have historically benefitted from a high volume of UK leisure traffic, which typically accounts for around 20% of the business in peak months.

Switzerland’s tax free status means tobacco remains a big draw, taking a 30-40% share of sales in the main departure store.

Switzerland’s tax free and duty free status means tobacco is a big draw, taking a 30-40% share of sales in the main Aelia Duty Free departures store.

Indeed, of that percentage, around 30% of sales are accounted for by British visitors.

The tobacco assortment is also enticing to customers favouring menthol products, which are not banned in Switzerland as they have been in the EU since May 2020.

Elsewhere, Lagardere Travel Retail is set to open a new departures post-security Ralph Lauren monobrand unit in a space currently occupied by The Fashion Gallery in November.

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