Luxury brands step up battle for travelling shoppers

Wed Dec 18, 2013 2:09pm EST
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By Pascale Denis and Astrid Wendlandt

PARIS (Reuters) - Luxury brands are stepping up the battle for travelling shoppers with more outlets at airports and on cruise ships, tapping into one of the fastest growing sections of the market that looks set to keep booming thanks to soaring numbers of Asian tourists.

Revenues from travel retail, which also includes sales on airplanes, rose 9.4 percent in 2012 to 55.8 billion euros ($76.6 billion), according to a market study by Generation Research.

It should reach 60 billion euros this year and nearly double in size by 2020, the study forecast.

"This channel is becoming very important," Bruno Pavlovsky, chairman of Chanel's fashion business, said. "Customers are spending time in airports where the environment has become increasingly sophisticated."

The French luxury brand, the world's second-biggest behind Louis Vuitton by sales, has boutiques in four Asian airports and one at London's Heathrow, and next year will open a boutique in Paris Roissy Charles de Gaulle airport and another in Dubai.

Kering's Gucci, which like mega-brand rival Louis Vuitton has suffered a slowdown in the past two years partly due to emerging market shoppers' growing preference for logo-free products, has opened boutiques in the same locations recently.

Tourism spending is up 12 percent worldwide since January while spending by Chinese tourists in Europe is up closer to 20 percent, according to data from tax-refund company Global Blue.

Chinese tourists, who barely featured in luxury brands' customer statistics a little over a decade ago, now make up 29 percent of global luxury spending, consultancy Bain & Co said in a report published this week.   Continued...

A man with a tablet computer stands in a Duty Free store at the Fraport airport in Frankfurt November 14, 2012. REUTERS/Lisi Niesner