Auckland Airport selects James Richardson as its preferred second duty free operator

Auckland Airport announced today that it has identified James Richardson Group as the airport’s preferred second duty free operator from August 2009. Negotiations with James Richardson to finalise a contractual arrangement have now commenced and are expected to be concluded in a matter of weeks.

The selection of James Richardson (trading as JR Duty Free) follows an international tender process conducted ahead of the expiry in August 2009 of the duty free licence currently held by The Nuance Group (trading as Regency Duty Free).

The licence for James Richardson will run until June 2015, aligning with the term of the existing licence holder, DFS Group. Each operator will have stores in both the departures and arrivals areas of the international terminal, although details on the space and layout configuration are still being worked out.

Chief executive Simon Moutter commented, “We put the licence up for international tender to ensure we maintained a world-best duty free shopping solution to Auckland Airport travellers. James Richardson put forward a very impressive and compelling proposal in what was a hotly contested process. We’re confident they will bring an exciting new dimension to duty free shopping at Auckland Airport that offers travellers a broad and highly-competitive range of duty free items.”

Based in Melbourne, Australia, James Richardson ranks as the 10th largest duty free operator worldwide, with a record of accomplishment of successful operations in Australia and Israel over more than 30 years.

Mr David Mandie, AM, OBE, Chairman and Owner of James Richardson Group said, “We are delighted to have been selected to be one of the two duty free operators at Auckland Airport”. Evelyn Danos, Executive Director, added, “We are looking forward to the challenge of building a business which not only meets the customary expectations of travellers but one which also differentiates the duty free shopping experience. Our ambition is to invigorate the duty free market with spectacular looking stores, superb customer service and the world’s best brands at the best prices. We will deliver a uniquely New Zealand experience that will capture the hearts and minds of New Zealand travellers and visitors alike.”

Mr Moutter said incumbent operator, Regency Duty Free, had been part of the hotly contested tender. “We’ve enjoyed a successful 20 year partnership with Regency and would like to acknowledge the great service they have provided to duty free shoppers over the years. We are committed to working closely with Regency on a smooth and successful transition over the coming months, to ensure our overall duty free offering is maintained at a high standard throughout the changeover of operator.”

Last year, Auckland Airport changed plans to have a single, non-exclusive duty free retailer, following Commerce Commission intervention. Although it believed it had not breached the provisions of the Commerce Act, and that a single operator model offers benefits to travellers in terms of range and quality, the Airport decided to retain two operators rather than face the prospect of an extended dispute with the Commerce Commission.

Auckland Airport is continuing discussions with DFS Group regarding the implications of retaining two duty free operators and how to facilitate the entry of the second operator, and those discussions are expected to be complete by the end of March. Because these discussions are still progressing, the financial impact (including any capital expenditure requirements) of the change in operator are as yet unclear, Mr Moutter said.