Swiss Dufry buys 60% of the company Regstaer Vnukovo

Dufry
Dufry

Swiss Dufry, a major global operator of duty-free shops, has agreed to purchase 60% of the company Regstaer Vnukovo, managing stores at the Moscow airport “Vnukovo”. The message is posted on the company’s website.

The transaction is expected to be completed no earlier than in Q3 2019 – after receiving the usual approvals, as stated in the Dufry report – and provides for a long-term concession until 2035.

It will include more than 30 duty-free and duty-paid stores across the country with a sales area of more than 6,800 sq. m with an assortment of the main duty-free categories, as well as the fashion industry and accessories.

The transaction amount is not disclosed. Dufry reported that the revenue of Regstaer Vnukovo in 2018 amounted to 58.8 million euros, the company manages duty-free and duty-paid stores in one of the three airports in Moscow, which serves about 22 million passengers a year.

“The acquisition of a majority stake in the operator of Vnukovo airport stores will allow us to significantly strengthen our position in the Moscow region and achieve synergy at the operational level,” said Julian Diaz, CEO of Dufry, quoted in the report.

Dufry is now present in 7 of the 10 largest airports in Russia (including Sheremetyevo, Domodedovo and Pulkovo), serving clients of both international and domestic flights.

Regstaer group (“Regstaer”), founded in 1998, is one of the leading Russian operators of travel retail. The company is one of the main operators of duty-free shops at Sheremetyevo airport, the main operator of duty-free and duty-free shops at Vnukovo airport, the co-owner of the Aero Region company operating at the airports in Rostov-on-don and Mineralnye Vody, and also owns four Stefano Ricci boutiques in Moscow and St. Petersburg.

Duty free stores in Moscow “Vnukovo” is managed by LLC “Regstaer-m”, according to State register, its owners are registered in the British virgin Islands – Wellingston Properties Ltd. – 74,99%, and OOO “Vnukovo holding” of 25.01%. In 2017, the revenue of Regstaer-m, LLC amounted to 3.8 billion rubles, net profit – 429.7 million rubles.

This is not the first Dufry purchase in Russia. In 2012, it acquired a controlling stake in Russian LLC Regstaer, a joint venture between Dufry and Regstaer Group, managing the duty free network at Sheremetyevo. Company owns its stake through Cyprus “Dufry Staer Holding Limited”.

The remaining 49% is owned by Wellingston Properties Ltd (registered in the British virgin Islands). The joint venture operated nine stores with a total area of about 1,200 square meters, its annual revenue exceeded $50 million, Dufry reported.

The amount of the transaction was not disclosed by the buyer, but it provided that in the future Dufry will receive the exclusive right to manage the Regstaer Group business at the “Vnukovo” airport and its subsequent purchases.

Dufry AG was founded in 1865 as Weitnauer. In 1948 began to be engaged in wholesale deliveries of duty-free goods. In 1952 opened the first duty free retail store at Paris Le Bourget airport.

Since 2003, the company has been called Dufry, since 2005 it has been trading on the Swiss stock exchange. The retail network includes 2,300 duty-free and duty-paid stores at airports, ports and cruise ships with a total sales area of 453,000 sq. m. the company’s share in the global travel retail market at airports exceeds 20%.

Major shareholders (Refinitiv data.): a consortium led by Travel Retail Investments SCA (15,31% in the interests of physical persons, including current and former members of the Board of Directors), the sovereign Fund of Qatar (6,69%), Franklin Resources (5,37%), sovereign wealth Fund of Singapore (5,05%), Luxury Group Richemont Johann Rupert (5%).

Capitalization – $4.1 billion Financial performance (2018): revenue – 8.7 billion Swiss francs ($8.9 billion), net profit – 72 million Swiss francs ($73.4 million).

In Russia Dufry already owns 100% of LLC Dufry East (the operator of duty-free shops at the Moscow Domodedovo airport), CJSC Lenrianta (Pulkovo in St. Petersburg) and 51% of LLC Regstaer (Sheremetyevo in Moscow).

Duty-free trade is a very attractive business with huge prospects due to the growing passenger traffic of airports and, most importantly, the growth in the number of foreign tourists coming to Russia. The cost of the whole Dufry business in Russia could be up to 5 billion rubles, i.e. 60% – up to 3 billion rubles.

The turnover of duty-free trade in Russia before the economic crisis of 2014-2016 was estimated at about $1.2 billion. The sharp fall of the ruble, the collapse of one of the largest air carriers – Transaero and other macroeconomic factors have led to a reduction in the dutyfree market almost twice. But starting in 2017, the market perked up, today the turnover is approximately $700 million, and it will grow.

In December 2018, the decree of the Russian government “On the definition of checkpoints across the state border of the Russian Federation, which allows the sale of goods to individuals arriving in the customs territory of the Eurasian economic Union by air or water transport”, allowing the opening of duty free shops on arrival in Russia, came into force.

The first duty free shops on arrival at the beginning of 2019 opened at the airports of Moscow – Vnukovo and Sheremetyevo, the airport of St. Petersburg Pulkovo, the airport of Rostov-on-don Platov, and the airport of Ufa.

The opening of such shops was announced at Domodedovo airport, as well as the airports of Kazan and Yekaterinburg. The opening of new duty-free shops guarantees the market a 20% increase in the coming years.

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