Luxury segment ‘remains resilient’, according to Gebr. Heinemann

By Luke Barras-hill |

Gebr. Heinemann says it is ‘very satisfied’ with its year-to-date performance within the context of enduring downside pressures being felt across global travel retail.

In comments shared with TRBusiness for the Top 10 International Operators report, available online and via the press racks at the TFWA World Exhibition & Conference in Cannes (2-6 October), Chief Sales Officer Florian Seidel confirms the Hamburg-headquartered travel retail is targeting 75% of pre-crisis revenues again this year.

“All active markets i.e. those that are not subject to border closures or affected by the war in Ukraine, are making a strong comeback with regard to passenger numbers. Despite the challenges, travelling has a high priority for people. The luxury segment remains resilient.”

While noting that business travel has not yet returned in pre-Covid numbers, he strikes an upbeat tone.

Florian Seidel, Chief Sales Officer, Gebr. Heinemann.

Be alert to risk management, suppliers urged

“We are observing a real change in travel behaviour and expect a shift in peak seasons. Whereas we are used to seeing a peak in business travel from March to May and again in Autumn with another peak in holiday travel in the summer, for example, we have recorded steady sales numbers above our expectations this year since April.

“We expect this to last until October. Travel is heavily concentrated in this period, as passengers are afraid that Covid restrictions will come back in Autumn/Winter.”

The knock-on effect has been a sales recovery to 80% of pre-crisis levels in some locations such as Istanbul and Norway, where Heinemann and its joint venture partners command a sizeable retail footprint.

Delivery of products to Russia remain suspended due to the war with Ukraine.

“We feel obliged to take this step as part of our responsible corporate governance,” said Seidel. “We will carefully analyse and evaluate the geopolitical developments around Russia.”

Asked whether inflationary-led cost rises and squeezes across the supply chain, from raw materials sourcing to production and transportation (shipping and freight) is hurting the inventory levels of specific categories, Inken Callsen, Vice President Global Supply Chain, responded: “We face these challenges in all categories of limited raw material sourcing and production capacity. For example, accessories and toys are affected by this, as many articles or raw materials from these categories are shipped over long distances from overseas e.g. China.

“Together with suppliers we try to be as transparent as possible towards our customers regarding availabilities. For inbound and outbound transportation, we must calculate longer lead times for some routes, especially for sea freight.

“Due to these challenges, we expect more engagement from the suppliers when it comes to risk management and we will commit them more strongly to this.”

Heinemann says it has devised some new approaches to working with its partners, including exchanging six-month forecasts instead of the usual three-month projections.

“That is something that is unique in the industry,” claims Callsen. “We hold collaboration meetings up to to once a week with suppliers to check forecasts and talk about long-term industry out-of-stocks.

“In some cases, we place so-called ‘forward orders’ in which the forecast is used as a fixed order. This allows us to be supplied first. Collaboration is key to avoid unprecedented peaks.”

Heinemann says it holds collaboration meetings up to to once a week with its suppliers to check forecasts and talk about long-term industry out-of-stocks.

The firm confirms it is currently active within different tenders, from Melbourne to Belgrade and, unsurprisingly, will contest the highly coveted duty free tender launched by AENA across Spain’s airports.

In January, it will begin operating the four duty free and travel value shops it won at Dusseldorf Airport in a tender earlier this year.

For more on Heinemann, read the TRBusiness Top 10 International Operators report available online and from the press racks at the TFWA World Exhibition & Conference.

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