HDFS sees rising sales
Hellenic Duty Free Shops (HDFS), Europe’s most profitable travel retailer, is confident sales will continue rising this year on robust passenger traffic, its general director said yesterday. HDFS, with a market value of about 800 million euros ($1.09 billion), has exclusive rights to run duty-free retail stores at border crossings in Greece until 2048. «The indications we have up to now are satisfactory, and we remain optimistic for 2007,» HDFS General Director Giorgos Velentzas told Reuters in an interview. «We are satisfied both with sales and passenger traffic performance up to now.» Velentzas said the number of passengers passing through airports, ports and borders rose 9 percent year-on-year in the first two months of 2007 to 1.9 million and this would be reflected in full-year sales. He also expects a robust influx of tourists from countries outside the European Union this year, mainly from Russia, thanks to more flights between Greece and Russia. Russian tourists spend the most at duty-free stores, about 80 euros on average. HDFS reported a 14.8 percent rise in sales last year, thanks to strong business at all border crossings and a UK acquisition. Its sales grew to 300 million euros with net profit reaching 43 million. Majority-owned by Greek jeweler Folli-Follie, HDFS bought British jeweler Links of London last year and wants to expand the firm in Britain and Asia and bring it to Greece. Velentzas said HDFS would be interested in more acquisitions in the travel retail sector, mainly in emerging markets, to secure further growth. Eyes on China HDFS is also looking to bring Chinese tourists to Greece in a bid to cash in on their high spending on luxury goods. «We are examining all possibilities to operate a direct flight from Athens to China, possibly three times a week, with a focus on further boosting the profitability of the group,» Velentzas said. He said the firm was in the midst of expanding and upgrading its network of about 100 stores throughout Greece. «There should be no border crossing without an (HDFS) store,» Velentzas said. «At this moment, we are working on a business plan to see where we could open new stores.» Bulgaria’s entry into the European Union has ended sales of duty-free cigarettes on Greek borders with the country, but the rise in tourist numbers should offset the loss, he said. Shares in HDFS trade about 17 times estimated 2007 earnings, compared with a multiple of about 20 for Swiss peer Dufry, according to Reuters Estimates. The stock has underperformed the broader Greek market by 11 percent since the start of the year, having lost 2.8 percent.
