Duty Free Americas optimistic on surpassing $2.1 billion revenue in 2024

By Faye Bartle |

Leon Falic, Duty Free Americas

Leon Falic, President, Duty Free Americas.

Bidding for locations in New York while exploring opportunities in Europe, the Middle East and India to align with its broader international growth strategy pegs 2024 as a transformative year ahead for Duty Free Americas (DFA), as President Leon Falic tells TRBusiness in this exclusive interview.

A commitment to sustained expansion is credited as the driving force behind DFA’s continued revenue growth. The travel retailer achieved an annual revenue of $2 billion in 2022 and Falic says projections for 2023 anticipate a boost to $2.07 billion. The only way is up, it seems.

“For 2024, we are optimistic about surpassing the $2.1 billion mark, indicating a trajectory of continued progress and investment in capital to grow the Duty Free Americas footprint internationally,” he said.

The company’s reach now exceeds 250 stores in airports and at border crossings and the offerings are constantly evolving to ensure an elevated experience for shoppers. This approach will be maintained as the company continues to grow.

“Currently, we’re bidding for locations in New York, expanding in the Middle East, have recently opened a Falic Group office in Dubai, are exploring opportunities in India and engaging in strategic partnerships for European expansion,” revealed Falic.

Further developing its distinctive brand of ‘high end products at competitive prices’ outside of the Western Hemisphere is a bold move, yet the stage is well set.

“Key opportunities include robust passenger growth and leveraging technological advancements to enhance customer engagement and operational efficiency in our stores,’ said Falic. “Despite customer spend not meeting initial expectations, we anticipate improvements towards year-end.”

Macau “holding steady”

Looking to China, DFA’s existing Macau operations are “holding steady”, although admittedly are “not as robust as in the past”. Last year saw a duo of high-profile openings: an expanded beauty store and a TWG Tea boutique at The Venetian Macao.

TWG Tea, Duty Free Americas

TWG Tea boutique at The Venetian Macao.

“The spending patterns of the Chinese customer have shifted [to] looking for promotions as a primary purchase motivation, and we are closely monitoring this trend, anticipating a positive change this year,” said Falic.

As for how the expected uplift in China outbound travellers will impact the business, he commented: “The Chinese traveller is a significant customer demographic for us. While the numbers haven’t returned to pre-pandemic levels yet, we are optimistic about a stronger comeback this year.”

Heightened focus on discounts and promotions

Circling back to what Americas customers want now, DFA says that the drive to get a great deal is back on top.

The Macallan, Duty Free Americas

DFA opened the first-ever shop-in-shop in Americas travel retail for The Macallan at Panama Tocumen International Airport’s T2 in August 2023. 

“There’s a heightened focus on customers seeking discounts and promotions – a departure from the pandemic period where customers were primarily driven by product and indulgence,” said Falic.

“Brands that are more aggressive on pricing strategies seem to be gaining the most traction. We are strategically aligning our offerings to cater to the evolving preferences, ensuring that our pricing models and promotions resonate with the current customer mindset in the region.”

As referenced, the company is “actively involved” in new growth opportunities and tenders and anticipates announcing “a few” significant wins in the near future.

A highlight of 2023 was the first-ever shop-in-shop in Americas travel retail for The Macallan at Panama Tocumen International Airport’s Terminal 2
in August.

“[This] has proven to be a huge success with buyers travelling from all over Latin America to purchase bottles they cannot find anywhere else,” said Falic. “The performance has surpassed our expectations with a high spend per bottle, reflecting the strong partnership between The Macallan and Duty Free Americas.”

Uruguay border stores drive growth

DFA’s primary focus this year, however, is strengthening its border store business, “considering the notable loyalty it garnered post-pandemic”.

“We recognise the recurring customer base associated with border stores, versus the airport business when customers visit based on travel schedules,” said Falic.

“To capitalise on this loyalty, we’re continuing to invest and expand into different product categories. We’re also allocating significant capital expenditure to drive growth.

Chanel, Duty Free Americas

Chanel activation at Miami International Airport.

Activity is concentrated in Uruguay, as Falic revealed: “We closed our Brazil border business, putting a strategic focus on the Uruguayan side, proven to be some of our best-performing businesses with a remarkable recovery and over 50% growth in the last year.

“We continue to invest in and prioritise these stores,” he added. “In terms of wider Latin America, we’ve established a footprint in almost every country and we are experiencing growth.

“Looking ahead, we are exploring opportunities in other regions and remain optimistic about our potential for expansion and success in Latin America.”

As for a potential move into stores at cruise ports, it’s a case of ‘watch this space’ with Falic teasing that an upcoming announcement will be shared soon.

A version of this feature first appeared in the TRBusiness March/April 2024 issue, as part of the annual Leading Americas Operators report. Click here to read the ezine.

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