Lotte Duty Free is the new owner of JR/Duty Free in Australia and New Zealand after concluding a transaction to purchase the business (*31st December).

Completion of the deal, which was announced jointly by James Richardson Proprietary Limited and Lotte Duty Free, means the latter now controls on-airport stores in Brisbane, Darwin, Wellington and Canberra, plus the CBD store in Melbourne’s Swanson Street.

JR/Duty Free’s existing management and staff are being transferred to Lotte Duty Free, while JR/Duty Free Owner and Chairman Evelyn Danos and CEO and Director Milton Lasnitzki will act as consultants to the South Korean travel retail giant in view of its wider regional growth.

Steve Timms has been named as CEO of the business and Sean Lee as Vice President.

JR EXPERTISE ‘A STRONG FOUNDATION’

Reports of a possible ‘acquisition’ first surfaced in South Korean media earlier this year, with Lotte confirming the interest directly to TRBusiness. JR/Duty Free declined to comment on the speculation at the time.

It later emerged that the interest was directed specifically towards JR/Duty Free’s Australia and New Zealand business, with a ‘main contract’ agreement subsequently signed by both parties.

In a statement, Chang Young Park, Managing Director Lotte Business Development, paid tribute to Lasnitzki and JR/Duty Free’s senior management for its close cooperation and smooth facilitation of the necessary contract approvals ahead of its completion.

“The involvement of senior Lotte personnel with senior James Richardson management in recent months has only strengthened our view that the expertise of the JR team is a strong foundation for Lotte’s planned growth in Australia and New Zealand,” he said.

He also praised the airports and customs offices for their assistance in expediting procedures, as Lotte Duty Free embarks on ‘an exciting new chapter’ in its international expansion.

DUTY FREE COMMITMENT

JR/Duty Free Owner and Chairman Danos added: “I am pleased that Lotte is committed to growth in our region as the first Asian player to operate here. It will provide enormous opportunities to all the stakeholders: employees, airports, suppliers and – most of all – customers.

“This is the second time our family has exited from duty free in the region, so there is naturally more than a tinge of sadness not to be a continuing part of the industry in the region. Nevertheless, we continue to be committed to the duty free industry predominantly with our presence in Israel.”

Lotte Duty Free estimates that the Australian duty free market registered sales of around KRW1.35 trillion ($1.2bn) last year and the number of outbound travellers has been increasing by 10% each year.

It has made no secret of its plans to become the largest global duty free operator in the near future as it continues to strengthen its buying power overseas.

Currently, it boasts a presence at locations including Jakarta downtown, Guam Airport, Kansai Airport, Tokyo Ginza, Bangkok downtown, Da Nang Airport and Nha Trang Cam Ranh Airport.

“Lotte has been assessing this opportunity and entry into the region for a number of years,” Lotte Duty Free Shop CEO Jang Seon-wook said at the contract signing in August.

“The acquisition is an important strategic milestone, as Lotte Duty Free becomes the first Asian player to operate duty free in Australia and New Zealand.”

*Midnight local time Melbourne