Lagardère Travel Retail has secured the duty free contract at Prague Václav Havel International Airport 

The tender was issued at the end of last year and the contract, beginning on 1 January 2020 covers 24 business units with a total area of 4,372sq m across both terminals.

The decision to award incumbent operator Lagardère Travel Retail the concession ahead of Dufry Group and Gebr. Heinemann was based on the quality of services, range of products and rent proposed.

Following the awarding of the contract, Prague Airport said it would acquire a globally strong duty free operator which would bring a much wider offer tailored to individual passenger segments.

Lagardère also vowed to deliver new exclusive brands, stylish and modern shop design, digital sales elements, new sales channels and an expanded local product offer.

DEMANDING CONCESSION PROCEDURE

Vaclav Rehor, Chairman, Prague Airport Board of Directors said: “The successful completion of the demanding concession procedure will bring the passengers a much broader and better quality offer of duty free products and services.

“On the other hand, thanks to the result of the concession procedure, Prague Airport was able to fulfil its strategy in the area of non-aviation business, which consists of continually expanding the offer, increasing the quality of products and services, lowering prices and at the same time increasing non-aviation business revenues. This should even up the aviation revenues over the longer term.”

At present, non-aviation revenues account for about 30% of Prague Airport’s total annual revenues. The remainder of the revenue comes from aviation business.

The duration of the contract is 10 years, which can be terminated after seven years due to the development project in Terminal 2. Total rent for the duration of the agreement is up to CZK8bn. The contract also includes the operation of the Terminal 1 walkthrough zone, which Lagardère Travel Retail already operates, along with some other units.

Rehor added:  “As part of the concession procedure, we have received high-quality and in all respects balanced offers from three world leaders in the duty free business. We are pleased that the best offer finally came from Lagardère Travel Retail, with which we can continue our very good and mutually friendly cooperation in creating a modern duty free product focused on the customers and their current needs.”

NEW OPENINGS

Lagardère Travel Retail will open seven different types of shops at Václav Havel Airport within a few months. Each will be focused on a different assortment and brands and on a specific type of consumer. The offers will be adapted to the nationality of passengers along with their age, needs, way of travelling and shopping or income.

The shops will acquire a ‘new stylish and modern design’, which will be introduced in Prague for the first time. The look of the shops, including furniture and equipment will clearly refer to the history, architecture and art of Prague and the Czech Republic.

Emphasis will also be placed on the local product offer with Lagardère offering 80 local brands of which 32 will be appearing at the airport for the first time. Overall, the retailer will sell 767 brands (140 new) and 90 exclusive product lines.

A key element of Lagardère Travel Retail’s successful proposal was its promise to provide specially trained staff with broad language skills, focusing on Asia in particular. The proposal also promised innovative sales channels with an emphasis on online sales and either modern payment solutions or a loyalty portal.

Once the new contract begins, a renovation project will commence with part of the space expected to be operational at the end of March 2020. All 24 business units will be re-opened no later than 30 June 2020.

The main concept is Aelia Duty Free, which will be adapted to the specifics of each terminal and location — Aelia Duty Free, Aelia Duty Free Beauty, and Aelia Duty Free Smart Traveler.

Throughout the customer journey and across all categories, the retailer will introduce ‘immersive and evolving experiences’, as well as interactive areas to engage with all type of passengers across all categories — fine food, souvenirs, beers, fragrances, skincare and make-up, confectionery, toys.

Lagardère will also offer a fully rejuvenated omnichannel retail strategy that provide a next generation digital marketplace, click and collect service, new frictionless payment solutions to improve the shopping experience and an airport-specific loyalty program in partnership with the airlines.

In addition Lagardère Travel Retail proposed a collaborative approach to innovation, with frequent sessions to ensure the digital roadmap is constantly relevant.

Frédéric Chevalier, COO Europe, Middle East & Africa commented: “We have enjoyed a strong and successful partnership with Prague Airport for years and this win is a significant milestone for the group. Our partnership is stronger than ever as we embark on this new journey with a shared vision of what travel retail should be today and for the next decade.”

Richard Procházka, CEO Lagardère Travel Retail Czech Republic added: “We know what passengers want and how to bring it to them. We will deliver a completely renewed shopping experience with new retail technologies and a continuous renewal of our offer to showcase the best of Prague and the Czech Republic alongside the trendiest brands and travel retail exclusives.

“Our unique glocal organisation — with experienced and empowered local teams supported by the expertise of the group — will enable us to do just that.”