Hamburg, 11 April 2017. In an overall satisfying 2016 financial year, Gebr. Heinemann achieved corporate balance and growth in the global Duty Free market, managing to offset the strong impact of global political developments on the international travel retail business as much as possible. The company managed to implement this strategy successfully, resulting in a controlled group turnover of 3.8 billion euros*, which equates to growth of +5.6 percent on the previous year. In Europe, the Hamburg-based and family-owned trading company remains the market leader with a market share of nearly 30 percent in the European airport Duty Free market. Allocated into the top three categories, LTC (Liquor, Tobacco, Confectionery) accounted for 58 percent of total sales, followed by Perfume & Cosmetics (31 percent) and Fashion & Accessories (8 percent). In the Asian region, sales increased from 6 percent to 10 percent.
Gebr. Heinemann will place even greater emphasis on global components. The more globally the company is positioned, the better it can offset country-specific risks. Winning the concessions in Sydney, setting up the joint venture with Duty Free International in Malaysia, and the successful retail business at Kuala Lumpur Airport all show what Heinemann is capable of in the Asian/Pacific market. In the USA, Heinemann Americas busily targets different distribution and retail opportunities.
Gebr. Heinemann is set to continue investing intensively in the travel retail market in 2017. A significant portion of the total investment, which is around 100 million euros, will be spent on the “Istanbul New Airport” project, the further development of the retail experience in Scandinavia and the further digital development of Connected Travel Retail. Another portion will be spent on the organisational optimisation of the company and the corresponding IT infrastructure.
The retail business has seen overall growth of 4 percent despite the strong impact of unexpected developments within the political sphere and the global economy. In December 2016, Gebr. Heinemann and Fraport AG agreed on the establishment of the joint venture Frankfurt Airport Retail GmbH & Co. KG (FAR), in which both partners hold a 50 percent share. On 1 January 2017, FAR took over the operation of all 27 Heinemann Duty Free & Travel Value Shops and Concept Stores at Frankfurt Airport. As a premium partner, FAR is the primary and most important supplier on Frankfurt Airport’s online shopping platform, which was launched in March 2017. This was an important milestone for the digital strategy of Gebr. Heinemann. From now on, Heinemann’s delivery service can be offered on third-party web shops.
At Amsterdam Airport Schiphol, where the concept of a joint venture partnership between Gebr. Heinemann and an airport operator has already proven to be a successful model, the first full year of operations closed having achieved the expected sales figures. The world’s largest Arrivals Duty Free shop opened its doors at Oslo Airport in September 2016. It was the first full year of operations for Heinemann Tax & Duty Free at Sydney Airport and a very successful one, with sales of +47 percent proving the effectiveness of this retail concept. Within the Istanbul New Airport project, where Heinemann/Unifree is responsible for the management of 50,000 square metres of retail space, the focus lay on the development of the terminal architecture, integrating luxury brands, two main Duty Free shops and five “villages” with different identities and a diverse range of products on offer.
Despite various market challenges, especially the weakness of the rouble, Gebr. Heinemann can report positive development in the Distribution business overall. In 2016, the company showed double-digit growth, mainly due to the strong growth in the Russian/CIS market. As well as in Russia/CIS, Gebr. Heinemann also showed growth in all other sales channels. Furthermore, supply agreements were concluded with 17 new customers at airports in nearly 20 countries in the African market.
In the Russian/CIS market, Gebr. Heinemann has invested in new business during this tough economic and political phase, especially in border shops in Georgia, Ukraine and Belarus. At Moscow’s Sheremetyevo International Airport, the important Terminal D was taken over by the joint venture IDF (Gebr. Heinemann and Sheremetyevo Airport). Retail sales were significantly up on the previous year and were within the planned figures at all locations.
Gebr. Heinemann’s goal is to provide a lasting contribution to its customers’ long-term success by creating added value for them. Through its global organisation, the company can now offer the same quality of service around the globe to customers who act internationally, such as cruise ship operators and airlines.
Purchasing and logistics update
The company sees potential for growth with a striking product range that is innovative and surprising. There is, for example, the comprehensive “tool box” for Perfume & Cosmetics, which offers new categories, Travel Retail Exclusives, innovative promotion concepts, exclusive perfume collections and commercial niche brands at the right price. Gebr. Heinemann is also advancing the Fashion & Accessories category with even more luxury brands and is increasing its focus on Watches & Jewellery.
In view of the increasing global and multi-channel presence of Gebr. Heinemann, the new Fulfillment Department ensures profitability and customer satisfaction as well as an optimum stock situation. In addition to this, Gebr. Heinemann has initiated the Travel Retail Data Innovation Group (TRDIG) which develops global standards in master data management to enable automation in data exchange between travel retailers and the industry.
In Singapore, the 3PL logistics centre has successfully started operations. It creates ideal conditions for further growth in this important market. For Istanbul New Airport, the layout and the basic concept for warehouse logistics were concluded with Unifree.
In 2017, the “Plastic bag fee for the protection of the environment” pilot project will be tested for one year at 14 German and Austrian Heinemann Duty Free locations. Disposable bags (plastic bags, paper bags, zip bags) are offered at a cost of 30 cents each. As an alternative to disposable bags, Heinemann Duty Free offers high-quality reusable bags at 2 euros each. This is reducing the volume of single-use plastic bags in circulation, while a share of the proceeds from the initiative goes to the marine conservation organisation OceanCare. The initiative has already been very well received by customers, with the figures for March 2017 showing a 400 percent increase in reusable bag sales and a 50 percent reduction in plastic bag consumption.
*As of April 2017: preliminary controlled group turnover of Gebr. Heinemann and affiliates.
Head of Corporate Communications
+49 40 3010-23849