Dufry acquires Latinoamericana de Duty Free in Mexico

Nicole Mezzasalma

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The acquisition includes operations at airports in Mexico City, Acapulco, Guadalajara, Leon, Monterrey, Los Cabos, Ixtapa and Puerto Vallarta

Dufry Group has signed a contract to take over the duty-free assets and contracts belonging to Latinoamericana de Duty Free (LDF). The acquisition includes operations in the core product categories at airports in Mexico City, Acapulco, Guadalajara, Leon, Monterrey, Los Cabos, Ixtapa and Puerto Vallarta.

Dufry said that the acquisition would help the operator to double its turnover in Mexico, and at the same time expand its presence in the country’s travel-retail sector. The company said in a statement: “The combination of LDF’s duty-free business with Dufry’s existing local operations will enable the company to implement substantial synergies across all functions in Mexico as the agreement foresees that Dufry will acquire the retail operations and contracts and the existing personnel, leaving scope to operate all back office and administration tasks with the existing structure.”

Where both Dufry and LDF have duty-free operations, such as Mexico City, the company will reorganise the retail space to “capture the additional sales potential” through measures such as the introduction of Hudson Group concepts in the country. The transaction will add 24 shops with more than 3,700sq m (39,826sq ft) to Dufry’s portfolio in Mexico, as well as about 200 employees.

Dufry CEO Julián Díaz said: “The transaction is a clear example of the type of consolidation that will continue. The acquisition of LDF’s duty-free operations will substantially strengthen our position as a leading operator in the Mexican travel-retail market and we will nearly double our turnover in Mexico. At the same time, it allows us to fully restructure our Mexican operations and to create a significant amount of synergies. Last but not least, it will also provide us with the opportunity to introduce the Hudson business model in Mexico.”

The company also signed an agreement to operate 41 stores in the 13 largest railway stations in Europe, where it will also implement the Hudson concept. The 18-year deal with Grandi Stazioni includes the main stations in Rome, Milan, Turin and Bologna, serving up to 150m passengers a year. Dufry will take over existing shops covering 915sq m (9,848sq ft) of retail area as well as expanding the number of stores and retail space to 1,900sq m (20,451sq ft) in the near future.

Díaz added: “The newly-established presence in the railway stations provides the critical mass for Hudson in Europe and at the same time it complements Dufry’s activities at Italian airports. With the new business, Dufry strengthens its position as a leading travel retailer in the Italian market, combining a strong duty-free business with a pre-eminent position in the duty-paid convenience store segment at airports and long-distance railway stations. The latter is an interesting opportunity to leverage and further roll out Dufry’s duty-paid expertise based on our in-depth understanding of travellers’ behaviour. The new contract allows us to enter the business right away and to develop the retail space by implementing our concept.”