DFS group, the operator for duty-free liquor and tobacco stores at Changi Airport, is withdrawing from Changi Airport.

These stores will be shut by June 8, 2020, once the current lease for DFS expires, retail media outlet TRBusiness reported.

The Straits Times further reported that hundreds of staff are expected to lose their jobs as a result of the withdrawal by Changi's biggest and oldest tenant.

DFS has been operating at the airport for 38 years.

Did not participate in tender or proceed with extension

TRBusiness further reported that DFS group decided not to proceed with a two-year extension to its liquor and tobacco concession, from 9 April 2020 to 8 April 2022.

DFS also chose not to participate in a tender for an 18-store concession, under a contract of six-years, from 9 June 2020 to 8 June 2026.

Instead, it agreed to extend its current tenancy by two months with Changi Airport Group (CAG) until June 8, 2020.

"Not a financially viable option" to stay in Changi

As for why it was opting to withdraw, Ed Brennan, DFS Group Chairman and CEO stated in a statement seen by TRBusiness, the decision had been based on the firm's "unique understanding" of the business environment as the current operator of the liquor and tobacco concession at Changi.

He further elaborated:

"Specifically, changing regulations concerning the sale of liquor and tobacco, against a global context of geopolitical uncertainty, meant that staying in Changi was not a financially viable option."

In April 2019, the allowable quantity of duty-free alcohol that can be purchased by travellers arriving in Singapore was reduced from three litres to two.

Also reduced, in February 2019, was the cost of allowable items for GST relief for overseas purchases.

Brennan stressed however, that the decision was not taken lightly given the length of their operations with Changi Aiport.

He added:

"Although this decision is the right one for our business, it was not taken lightly. DFS has held the concession at Changi Airport since 1980 and during this time we have exceeded all expectations for what travel retail can offer in an airport environment. We are proud of our achievements and deeply appreciative of the efforts of many talented people who have contributed to our success"

He also thanked Changi Aiport, stating:

"We sincerely thank the Changi Airport Group for their past support and extend our best wishes as they take the liquor and tobacco concession operations forward in partnership with a new operator."

Brennan clarified that the luxury concession for DFS at Changi would continue to operate as usual, along with its businesses at at T Galleria and Singapore Cruise Centre.

CAG voices disappointment, adds that new tender to be awarded by end of 2019

A spokesperson for CAG, Ivan Tan, was quoted by ST as stating:

"We are disappointed that they have opted not to participate in this tender but we will work closely with them to ensure a smooth transition to the new operator for the liquor and tobacco concession."

The Group Senior Vice President, Airside Concessions, Teo Chew Hoon was also quoted by TRBusiness as stating that CAG had since received several new proposals and would soon begin evaluating them.

The tender is expected to be awarded by the end of 2019.

Top image collage National Archives and DFS Facebook

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