Beauty house Nivea, owned by Germany’s Beiersdorf, has decided to pull out of the duty free and travel retail business in Europe – but the brand says it will not lay off any staff.

The shock move comes on the heels of recent exits by Chocolat Frey from the entire channel and also Chanel from Incheon Airport.  The Beiersdorf decision does not affect high-end stablemate La Prairie’s operations in DF&TR.

Beiersdorf has decided “to realign Nivea´s travel retail business” according to a company statement, adding: “For the future, the focus of Nivea’s travel retail business will lie with markets outside of Europe.”

UNFAVOURABLE ENVIRONMENT

Nivea Travel Retail says: “The last few years have shown, that the purchase behaviour of shoppers within the European travel environment is not yet as favourable for us (compared with) other regions of the world. After careful consideration, we have therefore decided to discontinue our activities in Europe.”

The department adds that it will keep monitoring the development of the channel in Europe with a possible view to re-entry in the future.

The decision underlines the difficultly for mass market brands to gain successful and profitable footholds in the highly competitive DF&TR business which still regards itself primarily as a luxury channel. Almost exactly a year ago, Nivea announced a concerted push into DF&TR which has clearly been tougher than was anticipated, with pricing one of the key issues.

MIDDLE EAST & INDIA FOCUS

With Europe out of the picture, Nivea TR is extending its reach in the Middle East/North Africa, and also India. The business unit running these regions is based in Dubai and it will remain responsible for all operations and further expansion in this region.

Nivea’s oldest connection with the DF&TR channel is via the Dubai office and the brand has been established in this channel in this region for many years. Here, Nivea says that the passenger, and hence the potential shopper, is different.

“This different shopper-mix as well as the level of distribution and availability of Nivea ranges in the respective countries differs from that in Europe (where Nivea is extremely well distributed across all sales channels),” says the beauty house.