Positive results for Dufry South America

Nicole Mezzasalma

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The retailer’s turnover was up by 18% in 2008 despite a tough fourth quarter

Retailer Dufry South America (DSA) has recorded an 18% rise in turnover to $608.2m in 2008 compared with the previous year. Gross profit increased by 20% to $356m last year and EBITDA grew by 23% to $126.5m. The company said that a good performance in the first nine months of the year—where DSA “made the most out of the favourable market situation”—helped to offset the impact of the global economic crisis in the last quarter of 2008, when passengers numbers fell by 5%.

The company’s airport shops accounted for 84% of DSA’s turnover and registered annual turnover growth of 21% due to a 4.4% increase in international passenger traffic. Average transaction values were boosted in the first eight months of the year by the appreciation of the Brazilian real against the US dollar. The opening of four new stores including two duty-free outlets at Belo Horizonte International airport, and the re-opening of two duty-free shops at Brasília International airport, also contributed to the results.

DSA said in a statement: “In the [last quarter of 2008] duty-free revenue decreased by 5% compared with the same period last year. We introduced several campaigns in the quarter to mitigate the impact from the lower passenger numbers and the US dollar appreciation, such as marketing initiatives, discounts on certain products to increase penetration as well as average ticket value. These activities allowed us to maintain our productivity and the turnover decrease developed in line with international traffic that fell by 5% in the same period.”

Cruiseline shops represented 14% of DSA’s annual turnover and recorded a 19% increase in sales compared with 2007, “mainly driven by launching operations on three new ships, adding another 10 new duty-free shops to the segment”, the company said. The crisis in the last quarter of 2008 affected the high-end jewellery category as cruise companies introduced promotions to attract a broader, less affluent customer base.

Fragrances and cosmetics represented 36% of total sales in 2008, followed by liquor (19%) and jewellery and watches (19%). Food sales corresponded to 8% of total sales, ahead of electronics (7%) and tobacco products (2%). Other items, including fashion and accessories, represented 9% of DSA’s sales.

The company concluded: “Even though the global economic scenario is not favourable for 2009, we will take advantage of all opportunities in our shops, be it at airports or in the cruiseship segment. For instance, the initiatives we have been taking with our suppliers, consisting of offering discounts and staging promotions at our shops, will continue this year. We have also actively managed our working capital and have started to work with suppliers in certain product categories. Another important target for this year, besides driving revenue through average ticket per passenger and penetration rate, is a strict policy for cost control. A combination of both elements will enable DSA to manage its profitability.”