Colm McLoughlin, managing director of Dubai Duty Free, tells the 6th Arabian Business Forum why the retailer won’t be expanding outside of its home market any time soon
Colm Mcloughlin, the managing director of Dubai Duty Free, has an amazing ability to remember figures. It’s not hard to see why when he starts to reel off some of the impressive numbers that the Dubai-based retailer has achieved in the 29 years since its inception.
“We opened for business on 20 December 1983 and on that day our sales were AED160,000 ($43,500), which is good for a first day. On 20 December 2011 our sales had jumped to AED86m,” he tells the audience at the 6th Arabian Business Forum.
“We [currently] have 4,000 staff; we did 22.5 million transactions on our registers last year; sold 18 million units of merchandise last year; we’ve given away 31 luxury cars; last year we gave away $14m in our millionaire promotion; we apprehended 5,794 shoplifters; received 35,000 unsolicited CVs; hired 850 people last year; we had 350 resignations and terminated 33,” he adds, laughing.
The growth of Dubai Duty Free over the last three decades has gone hand-in-hand with both Emirates Airline’s expansion and Dubai’s international status as a travel and tourism hub. Today, the retailer, which is owned by the Investment Corporation of Dubai, operates 18,000 sq m of retail space and last year sold AED5.3bn of merchandise, a 15.7 percent increase on the previous year.
“We take around $47-$48 per passenger that goes through the airport and our penetration is just under 50 percent,” says McLoughlin. “If you look around at the good airports like Heathrow and Singapore generally the penetration in those airports is seventeen-eighteen percent. We’re on target for sales of AED6bn in 2012,” he adds.
McLoughlin, who arrived in Dubai for a six-month stint in 1983 and still calls the emirate his home, doesn’t plan to stop the retailer’s growth any time soon. The Dubai-based firm increased the size of a multi-tranche loan facility it is currently raising to $1.5bn last month to help fund the expansion of Dubai’s international airport.
The funds, driven by high interest from local and international lenders, will help finance the infrastructure of Concourse 4 at the airport, he explains.
“The reason for that is that the government has decided that Dubai Duty Free will be the main financier of Concourse 4. It will cost $7.8bn and we’re currently borrowing $1.5bn to help the building of the airport structure. Dubai Duty Free will be building 6-7,000 sq m of retail space in Concourse 4.”
Other examples of organic growth will come from some 8,000 sq ft of retail space at Dubai International Airport’s Concourse 3.
McLoughlin does rule out international expansion in the near future but says it may look to expand its operations outside of its home market when it reaches saturation. “We might make $500,000 a year — but that’s not needed yet. We can make more money staying here than looking around… It’s not in our list yet, it’s fairly far down our list and its not been needed yet,” he says, adding that he wasn’t disappointed by unsuccessful bids to operate duty free operations at Beirut and Colombo international airports.
“If ever Dubai Duty Free got to a rate of saturation then of course they would go out into the market and set out to bid for a other airports but right now we are amateurs at that, there are professional companies around the world…. who know this business inside out,” he adds.
Judging from the expansion plans in its home market, it looks like Dubai Duty Free will have its hands full for some time yet.