The James Richardson and Gebr. Heinemann joint venture today confirmed it has won the liquor, tobacco, perfume and cosmetics and confectionery contract at both the T3 and T1 terminals at Ben Gurion International Airport in Tel Aviv, Israel.
This effectively means that Richardson will continue to operate at Ben Gurion for another ten years, although this time around it will welcome Heinemann as its partner in the business.
THIS ‘NEW ALLIANCE’ NOW HAS CRITICAL RETAIL MASSE….
As is well known, Gebr. Heinemann is the fourth largest duty free operator in the world, a market leader in Europe and it is also one of only two large independent family-owned companies amongst the global leaders still trading in the industry.
Commenting on this major victory, Garry Stock, Chairman, Duty Free at James Richardson said: “It has always been our intention to stay at Ben Gurion Airport. James Richardson has a long and proud history in Israel and we are thrilled to be extending this in the future.
“Heinemann will bring know-how gained from its presence in many European and other markets to further strengthen the JR Israel business”.
Adding his comments, Raoul Spanger, Executive Director, Gebr. Heinemann said: “No one knows the Israeli travel consumer better than James Richardson and we are very happy and confident that together we can further develop the business at Ben Gurion.”
BETTER VALUE AND AN ENHANCED SHOPPING OFFER’
Both partners said they are ‘looking forward to further improving the highly regarded duty free experience enjoyed by Israeli and tourist travellers at Ben Gurion’, with the intention of offering even better value and an enhanced shopping experience.
As is well known, Heinemann is one of the most important players in the international travel market operating over 1,000 shops in more than 100 countries. In retail, it is active in 78 airports and 28 countries with 300 Heinemann Duty Free & Travel Value shops, license-managed brand boutiques and concept stores.
The company has also been designing its Duty Free &Travel Value Shops since 2008. In total, in 2015 Heinemann served over 40m customers over 115,000sq m of retail space.
THIS NEW CONTRACT NOW RUNS UNTIL 2024
Senior management at the Israel Airport Authority (IAA) confirmed to TRBusiness last June that it was tendering the new seven-year duty free contract at Tel Aviv with the closing date of 9 August 2017, although the actual award was not originally expected until next month.
James Richardson’s existing lease term for its duty free departures and arrivals business ends on 31 December 2017 and the company is now expected to take over the new lease with Heinemann as its new partner on 1 January, 2018.
As reported, the new contract covers the sale of alcohol, tobacco, perfume, cosmetics, chocolate and pharmaceuticals and also includes an optional three-year extension, subject to mutually agreed new terms.
Under the new contract, James Richardson and Gebr. Heinemann will also be obliged to set up an online pre-order purchasing service for passengers before they travel abroad.
In addition, the IAA has also expanded the duty free commercial areas in the boarding arms and effectively doubled it to provide passengers with an enjoyable shopping experience while waiting at the gates.
LAST BID GUARANTEE WAS AROUND 47.5% OF TOTAL REVENUES
James Richardson, more recently trading as JR/Duty Free, has been running this business uninterrupted since 1988, having successfully defended it in more than four concurrent tenders thereafter – and now that number is five. The last time it won the Tel Aviv Airport duty free contract it guaranteed $169m a year, or +$1.1bn over the full seven-year term.
This was equivalent to approximately 47.5% of total revenues expected over the seven-year contract, based roughly on the IAA’s estimate that the duty free concession was generating around $1m a day at that time in the location.