Hawaii to retender as DFS deal reached, say reports

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DFS Group and the State of Hawaii Department of Transportation have reached an agreement over their long-running dispute over an estimated $49m in back rent owed by the operator.

DFS Group and the State of Hawaii Department of Transportation have reached an agreement over their long-running dispute over an estimated $49m in back rent owed by the operator. The two parties reached a deal yesterday whereby the State is to cease legal action against DFS and retender the duty-free contract at its airports and in downtown Waikiki, with the winning operator expected to move in by October.

Reports in the Honolulu Advertiser today suggest that DFS will be allowed to operate through September, with the tender winner taking on the remainder of the contract, due to expire on May 31 2006. In addition, DFS' minimum annual guarantee was reduced from $60m to $40m, and the company will have to pay $30m for the year to the end of September. The retailer will also be made to pay an additional $285,226 on rent owed from 2002.

DFS Group vice president Sharon Weiner welcomed the settlement, and said that DFS would submit a bid for the new tender. ?It means we stay in business,? she said, ?and we hope to be the winning bidder for the new contract. There's a thousand people at our company that are very relieved to hear about this agreement."

The State said the minimum annual guarantee could be reduced further next year depending on how sales fare this year, and that it anticipated "multiple bidders, because the new contract is shorter than three years". The deadline for bids is September 25.