China Tourism Group Duty Free Acquires DFS’s Greater China Operations
China Tourism Group Duty Free (CTG Duty-Free) has announced plans to acquire DFS’s travel retail operations, including stores in Hong Kong and Macau. This significant acquisition was officially revealed on January 19, 2023, in a joint statement from CTG Duty-Free and DFS, a luxury retail entity owned by LVMH and co-founded by Robert Miller.
Deal Details
The acquisition encompasses all DFS retail locations in Hong Kong and Macau, excluding the City of Dreams. Additionally, CTG Duty-Free will acquire various intangible assets related to DFS brands and intellectual properties, exclusively for usage in Greater China. This deal will be executed through CTG Duty-Free’s subsidiary, China Duty Free International Limited, with payments made in cash.
Impact on DFS’s Operations
Post-acquisition, DFS will maintain its luxury retail operations globally. This move reflects a strategic transition for DFS, with Chairman and CEO Ed Brennan mentioning the pride the company holds in its established presence in Hong Kong and Macau. He expressed confidence that CTG Duty-Free would enhance the shopping experience, bringing new skills and insights.
Strategic Collaboration with LVMH
Alongside the acquisition, LVMH and the Miller Family will be investing in CTG Duty-Free by purchasing newly issued H-shares on the Hong Kong Stock Exchange. This subscription is part of a broader aim to fortify their partnership and explore collaborative opportunities within the luxury retail sector.
Statements from Leadership
Luke Chang, Executive Director and President of CTG Duty-Free, emphasized the importance of this acquisition in expanding the company’s service network across the Greater Bay Area. This move aims to promote Chinese domestic brands internationally, solidifying CTG Duty-Free’s commitment to high-quality retail service.
Michael Schriver, LVMH’s President for North Asia, highlighted CTG Duty-Free as an ideal partner for the next developmental phase of DFS in Hong Kong and Macau, acknowledging their proven expertise in the travel retail market.
Significance of the Acquisition
This acquisition marks a pivotal shift in the global travel retail landscape, enhancing CTG Duty-Free’s market dominance in Greater China. The transaction is subject to customary closing conditions and is expected to finalize within approximately two months.
Industry Commentary
This development not only impacts CTG Duty-Free and DFS but also signals a seismic shift in the travel retail market. For DFS, it represents the conclusion of a significant chapter in its history, while for CTG Duty-Free, it signifies a transformative milestone towards further international expansion.
Conclusion
The acquisition of DFS’s Greater China operations by China Tourism Group Duty Free is a notable development affecting both companies and the wider retail sector. As CTG Duty-Free enhances its presence, the collaboration with LVMH sets the stage for future innovations in luxury retail aimed at Chinese consumers.
