With the signing of these agreements, which were structured as bid processes or requests for proposal, Dufry has renewed and expanded its contracts in all airports that have been privatized in Brazil to date. Furthermore, Dufry also opened a duty paid shop in Goiânia.
All the contracts with the private airport operators have a 10 year duration and will allow to develop the business in the long-term.
Overall, Dufry will operate 19,702 square meters of retail space in these locations once all the expansion projects in the different airports are completed, an increase of 13,626 square meters, or 324%, compared to 6,076 square meters before the privatization.
With these new agreements, Dufry enters a new phase in the development of the Brazilian travel retail market.
The refurbished and expanded airports will allow creating substantially larger and better retail space and significantly improved performance compared to the current situation, where the potential is restricted due to a lack of capacity in the existing infrastructure.
As a result, Dufry can create a truly first class shopping experience for passengers in Brazil, which provides scope for a substantial increase in spend per passenger and overall sales.
The new duty free contracts will be operated through a new joint venture, which will become the platform to develop the duty free business in Brazil going forward.
As to duty paid, Dufry can considerably expand this sector in Brazil as well and tap the important domestic traffic. Around 90% of all air passengers in Brazil are domestic and the build-up of the duty paid sector will be an important element in the development of the Brazilian business going forward.
Overall, the new contracts will allow Dufry to substantially strengthen the travel retail in Brazil and to capture the true potential of the Brazilian airport retail business, in both duty free and duty paid. At the same time, the business will also be a very strong platform to develop other travel retail channels and segments in the country, such as duty free border shops.
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