Global family-run company Victorinox has increased its South American DF&TR presence by securing new listings with Dufry Group in its arrivals duty free store at Sao Paulo Guarulhos International Airport.

Victorinox, which invented the Original Swiss Army Knife, not only produces the well-known pocket knives, but also makes household and professional knives, watches, travel gear and fragrances.

In addition to stocking travel gear (luggage accessories and backpacks), GRU will be the first airport in the region to offer the brand’s multi-tool product range (Swiss Army knives).

ASIAN EXPANSION PLAN

Speaking to TRBusiness during a recent trip to Switzerland, during which members of the trade media undertook a cookery class, visited the company headquarters in Ibach, Schwyz and produced their own pocket knives during a factory tour, Thomas Bodenmann, Head of Travel Retail & Fragrance Sales, Victorinox said: “We are not satisfied with our geographical coverage that is for sure.

“Our base is in Switzerland and we have quite a decent presence in Europe, but there still are some holes such as London Heathrow, which is really a target and the airports in Paris.”

Bodenmann, who joined Victorinox from Mondelez World Travel Retail in August 2016, is content with the brand’s DF&TR coverage in Europe and Latin America, but admits it has ‘almost no presence’ in Asia.

This is despite the company directly operating one airside and one landside store at Hong Kong International Airport and opening a downtown store in Macau with Dufry last year.

“We really want to obtain more visibility as a brand in Asia because we know that our main customers in Europe are Asian and Chinese in particular. These consumers buy our knives, sometimes in their dozens because they want to bring them home as a little souvenir and gift from Switzerland,” he explained.

Establishing a foothold in the Middle East would also be viewed as a significant step, according to Bodenmann, who reveals the brand is present in around 50 airports worldwide. “Dubai International Airport is a hub and being there would enable us to reach so many people.”

He added: “We as a company are thinking long-term so prefer to actually wait or work hard to get the right space for the right shop.”

Looking back on a productive 2018, Bodenmann cites the opening of its first multi-category shop-in-shop in Scandinavian travel retail at Helsinki Airport as the main highlight.

The 24sq m space, opened in partnership with Dufry, showcases the brand’s multi-category product offering, featuring a broad selection of travel gear. This includes the Spectra and Lexicon Hardside Collections, I.N.O.X watches and famous multitools.

He remarked: “Helsinki is a transit hub to Asia, so for us it was always on the map. It is clear that Dufry really believes in us.”

CONTINUED GROWTH

Reflecting on overall DF&TR performance in 2018, Bodenmann says the brand is experiencing very strong growth albeit from a low base. “Three years ago, we calculated that travel retail comprised 1% of the global business. Currently, the share is 2% and we are aiming to reach around 5% in the next few years.”

While turnover is the channel is important it is not the defining factor. “Turnover is important for travel retail, but for us it is even more important to build brand awareness and visibility,” emphasised Bodenmann.

This year, the re-opening of the 48sq m refurbished Dufry-operated landside store at Zurich Airport was a significant milestone. Victorinox has around 16 points of sale at the airport including a directly operated airside store in Terminal 2. It has also implemented a dedicated pop-up concept adjacent to the Terminal 2 shop which will run until the end of the month.

“The assortment in the landside and airside stores are almost the same. In the landside outlet we can sell the bigger knives, but in the airside shop we can only sell knives which can be carried in hand-luggage,” Bodenmann said.

In terms of the brand’s overall DF&TR assortment, it is the travel gear segment which dominates sales, accounting for 60% of total business. The remainder of the DF&TR assortment comprises multi-tools (20%), fragrances (5%) and watches (15%).

“The travel gear category is certainly the one which is growing the most. Products include carry-on trolleys and backpacks with the latter being extremely important as business passengers seem to be purchasing more stylish backpacks.”

Reflecting on the evolution of the brand’s travel retail business over the past few years, Bodenmann says Victorinox always had visibility in the channel, but suggests the business was handled opportunistically.

He explained: “When the family decided a few years ago that it wanted to use this very important channel to build brand awareness and create a specialist department, the business was given fresh impetus.

“We now have a dedicated team who know the channel, are talking to the key players, expanding the footprint and sharing success stories.”

Carl Elsener IV, CEO Victorinox, who together with his family has been responsible for managing the company and expanding Victorinox as a global multi-product brand since 2007, is fully aware of the potential of the channel.

He told TRBusiness: “People are travelling more and more and we see very strong development globally. Until recently, we did not have a professional team to build a strategy to grow this business.

“Taking into account the big potential and growth opportunity for our brand in this area, we decided to hire someone who understands this business globally, can help define a strategy and roll it out.”

FAMILY VALUES

Pressed by TRBusiness on whether the company’s status as a family-owned business might help evolve the DF&TR business, Elsener remarked: “We have always experienced the great advantages of being a family-owned company such as long-term thinking and ability to invest in long-term partnerships.

“For us, the motivation is to connect with other family companies which have a long-term view and long history and heritage.”

Outlining the main challenges facing the brand as it looks to develop its travel retail business, Bodenmann, who is looking to create a lifestyle multi-category brand said: “The limits we have is space and the fact we are a new brand. In fact, we are a bit of an interesting label because most people know us because of the knives.

“We want people to realise we have other product categories as well.”

He added: “Let’s take Montblanc, for example. Everyone knows it is a multi-category brand, even through it started with a pen. I want people to realise we offer luggage and various other categories in addition to the knives.

“We understand this will take time and we need best practice cases which we are able to share,” he concluded.