LS Travel Retail announces strong annual turnover growth

In line with its international expansion strategy, Lagardère Services’ Travel Retail division saw its turnover continue the positive trend recorded during the first half of 2011.

Total turnover recorded by LS travel retail in 2011 (100% basis) stands at €2.3 billion, representing an increase of almost 8% on a like-for-like basis.

Dag Rasmussen, Chairman & CEO states: “These figures demonstrate LS travel retail’s capacity to successfully deploy its international growth strategy in airports and railway and metro stations in Europe, North America and Asia-Pacific. This momentum, which implies an impeccable knowledge of landlords and local markets by means of our operational subsidiaries, as well as the outstanding expertise of Aelia and our corporate teams, will help us continue to grow.”

The operations of LS travel retail are divided into three zones: EMEA, ASPAC and North America, and three segments: “news, gifts & convenience,” “duty free & luxury” and “food services.” Launched early in the year, this new group structure has proven successful, fostering solid, long-term partnerships with several landlords and enhancing the Group’s performance.

The slowdown in international activity, geopolitical events and unstable market conditions observed throughout the year did not have a negative impact on the good results recorded in most countries in which LS travel retail operates.

• France

LS travel retail France recorded excellent growth on a like-for-like basis with “duty free & luxury” sales up 10.4 % and “news, gifts & convenience” turnover up almost 6%.

Highlights of the year were the long-term renewal of the “duty free & luxury” franchise operated by SDA, the joint company of Aéroports de Paris and LS travel retail, and the creation of a new partnership for the “news, gifts & convenience” activity. Finally, November’s buyback of Nuance’s shares in Duty Free Paris (28 points of sale in fashion) and the absorption of this activity by SDA in December, reflect the business’ long-standing success in Parisian airports.

LS travel retail also made the most of the opening of the high-speed Rhine-Rhone train line and a call for tender launched by the Montpellier airport for the development of its food services via several concepts already offered by other franchises, namely the TRIB’S brand name.

• Germany

LS travel retail now operates 84 points of sale in Germany, 44 of which are in airports, resulting from the gain of 7 new stores at Frankfurt airport and the opening of 6 points of sale in railway stations.

• Poland

LS travel retail’s Polish activities show strong growth (+ 9.1 %), upheld by a 13% increase in “duty free & luxury” sales, the promising increase in the turnover of the 606 retail network stores operating under the RELAY and INMEDIO brand names and the expansion of food services activities with the EMPIK Café concept.

• Czech Republic

LS travel retail continues its strong growth (up 14.5% from 2010) carried by a leap of 53% of the “duty free & luxury” activity. The latter was the object of upgrades, the development of new lines and the opening of a Ferragamo store at Prague airport.

Also, the opening of new points of sale, the expansion of the food services activities of PAUL and Costa Coffee (whose network has grown with the acquisition of 13 points of sale previously operated under the name of Coffeeheaven), and the acquisition of 22 points of sale in the Prague metro reinforce this outstanding growth.

• Romania and Bulgaria

The turnover of Romanian activities is up almost 20% for 2011 with a network that now boasts 185 points of sale. In Bulgaria, the network has grown another 14 units, including a first RELAY store at Sofia airport, meaning a total of 60 stores and a turnover up by 60%.

• United Kingdom and Ireland

LS travel retail UK recorded turnover growth in excess of 18%, namely due to the opening of duty free and fashion stores at London City Airport and a Discover store at Glasgow airport.

• North America

The early-year’s poor weather conditions adversely affected the activity of all airports in America’s north-east, but LS travel retail recorded an optimistic year end with good sales in Canadian airports. The new iStore concept allowed 6 new units to be created across Canada and has significant potential for growth in the USA.

The Group also acquired several franchises at Dallas and Edmonton airports. Finally, early 2012, LS travel retail opened 3 points of sale at Montego Bay airport in Jamaica.

• Asia-Pacific

LS travel retail acquired 11 Whitcoulls stores in New Zealand’s 4 major airports and successfully obtained the concession for a duty-free store at Nouméa airport, thus affirming its desire to expand in this zone.

In Australia, LS travel retail renewed two key “news, books & convenience” franchises in terminal 2 of the Perth airport and in terminal 2 of the Sydney airport.

In Singapore, LS travel retail is rapidly expanding across its 4 main activities:
– Fashion with the Shanghai Fashion Gallery that opened late 2010 and the Dunhill and Longchamp stores late September,
– Confectionery with the opening of a 310m² “So Chocolate” store,
– News and Books with 8 stores in partnership with Times
– Speciality retail with 11 stores whose activity was unfortunately affected by works conducted in the T1 terminal in the first half of the year.

In Continental China, the network boasts 67 points of sale under the Relay, Hub and Discover brand names in the Shanghai and Beijing railway stations, in the Shenzhen and Shanghai metros and at Kunming, Hongqiao and Xiamen airports.

LS travel retail is also present in Hong Kong (12 points of sale) and Taiwan (6 points of sale).
Finally, LS travel retail recorded several successes in other countries in which it is present through its distribution network: namely in Hungary, with the opening of 4 points of sale at Budapest airport, and in Spain, with the opening of 2 fashion stores at Malaga and Alicante airports.