Nuance-Watson (Singapore) bids aggressively for beauty contract at Changi

Tina Milton

Print Article E-Mail Article E-Mail Author

Incumbent retailer Nuance-Watson (Singapore) leads the financial bidding race to defend its fragrances and cosmetics business at Singapore Changi airport

Nuance-Watson (Singapore)  has topped the bidding for the fragrances and cosmetics concession at Singapore Changi airport with an aggressive proposal to defend its current contract. The duty-free retailer bid 45% of total monthly gross sales or a minimum monthly guarantee of S$10,191,000 ($6,749,000) in year one, rising to S$10,591,000 ($7,013,900) in the second year and S$10,803,000 ($7,154,300) in the third year and two months, whichever is higher.

DFS Venture (Singapore) tabled a bid of 45% of total monthly gross sales or a minimum monthly guarantee of S$9,388,368 ($6,217,460) in year one,  S$9,626,888 ($6,375,222) in year two and S$9,821,388 ($6,504,230) in year three and two months, whichever is higher. It also tabled a bonus incentive of 5% of incremental annual sales above S$290m ($192m) for year one, two and three and for the remaining two months 5% of incremental sales above S$48,333,333.33 ($32,008,829).

Aelia offered 45% of total monthly gross sales or a minimum monthly guarantee of S$8.6m ($5.7m) in the first year, S$9.6m ($6.4m) in the second year and S$9.6m in year three and two months, whichever is higher. The company also offered a bonus of 5% of incremental gross sales for total annual gross sales above S$250m ($165.6m) in year one and 5% of incremental gross sales for total annual gross sales above S$300m ($198.7m) for year two and year three, and 5% of incremental gross sales for total gross sales above S$50m (33.1m) for the remaining two months.

Hotel Lotte offered 45% of total monthly gross sales or a minimum monthly guarantee of S$9,535,200 ($6,314,700), whichever is higher.

Aldeasa submitted the lowest bid with an offer of 45% of the total monthly gross sales or a minimum monthly guarantee of  S$8,002,201 ($5,299,470), whichever is higher.

On a like-for-like basis for the full term of the contract Nuance-Watson (Singapore) offered a minimum monthly guarantee of S$400,626,000 ($265,315,230), DFS Venture (Singapore) tabled S$365,682,504 ($242,173,840) plus bonuses,  Aelia offered S$352,800,000 ($233,642,000) plus bonuses, Hotel Lotte submitted S$362,337,600 ($239,958,670) and Aldeasa S$304,083,638 ($201,379,880).

Comment: Nuance-Watson (Singapore) is in a strong position to renew its contract at Changi. It was named Asia/Pacific Travel Retailer of the Year at the Raven Fox Awards for Travel-Retail Excellence in Asia/Pacific and also won the award for Best Fragrances and Cosmetics Travel Retailer in Asia/Pacific.  Executive general manager and global head of category Ken Tse said the group’s awards were even more of an achievement because it is a single-category retailer. The accolades could not have come at a better time for the retailer following the deadline for bid submissions on May 17. Its proposal may appear aggressive but Nuance-Watson (Singapore) has recognised that it  has to be realistic. Many industry sources expected Hotel Lotte to lead the bidding,  after its high financial bids in the liquor and tobacco tender, which ended in disappointment for the retailer after DFS Venture (Singapore) retained the concession.
But much will depend on the sales levels achieved by the retailers as both DFS Venture (Singapore) and Aelia’s bids are coupled with attractive bonus incentives, which may sway the Civil Aviation Authority of Singapore’s final decision.