Sydney jewellery tender heralds hunt for specialists

Dermot Davitt

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The airport has revealed the first step in the removal of non-core categories from its principal duty-free contract

Sydney Airport Corp has issued a Request for Proposals (RFP) for a number of jewellery concessions in terminal one, Sydney Airport's international terminal. The move is the first phase in a process that will ultimately remove non-core product categories from the main duty-free contract, as revealed in DFNI September 1, out now.

Bidders can make offers on one or more of six spaces in the departures hall and pier B and Pier C of the terminal. The stores vary in size from 40sq m to 100sq m (430-1,080sq ft), with contracts of two to five years, depending on location. Commencement dates range from February 15-March 1 2006. Submissions are due by October 7, with contract awards expected in November.

Some of the shorter contracts are subject to an additional five-year term, pending approval of the airport's development strategy and Retail Spatial Plan. This involves centralising immigration and security controls for all outbound passengers, who currently travel through either pier B or pier C. The timeframe for this to be completed is mid-2009, although the airport's board has yet to approve the plan.

Currently, incumbent duty-free concessionaire The Nuance Group sells jewellery, watches and opals in T1. But upon completion of the spatial plan, scheduled for mid-2009, the duty-free operator will cease trading in jewellery to concentrate on the core categories of liquor, tobacco, beauty and confectionery. Sydney Airport would then revise the mix of jewellery stores in the terminal and the jewellery operator(s) would move to alternative premises.

The airport will re-tender the main duty-free contract in early 2006.

Sydney Airport Corp general manager retail & commercial development Bob McFadyen said: "Under the plans we foresee for Sydney airport's development, duty-free will evolve to take in just the core categories. The other categories will be jettisoned and operated under specialist contracts. We've done a lot of analysis and there is a lot of upside to be achieved. There is still a big opportunity in the core duty-free business, which can be improved by having more of the right type of space allocated to it. Until now, the need for the duty-free operator to carry other lines has proved a distraction in some cases. There aren't the efficiencies and economies you can get by concentrating on the main high-volume, high-margin business."