Dubai Duty Free closed retail operations on March 25 due to the Covid-19 restrictions put in place at Dubai's airports
The closure of the 40,000 square metre-plus retail space belonging to Dubai Duty Free has caused revenue drop 49 percent so far this year, according to the retailer's executive vice chairman and CEO Colm McLoughlin.
Dubai Duty Free closed retail operations on March 25 due to the Covid-19 restrictions put in place at Dubai's airports.
McLoughlin, who has been with the Dubai Duty Free since 1983, said the world's largest airport retailer is awaiting official approval to open its operations in the coming days, as Emirates airline resumes a limited amount of passenger flights.
“It has been a sad story from the point of view of revenue and sales. Our sales are down 49 percent to date, on the same period last year, which is AED1.4bn ($380m) less than last year," McLoughlin told Dubai Eye's Business Breakfast show this week.
McLoughlin said Dubai Duty Free has paid suppliers and staff in the near two months since the closure of operations, with some of the staff voluntarily taking paycuts.
"We have paid all of our suppliers and continue to do so where there’s outstanding accounts. We have also paid all of our staff in full; our staff took their annual holidays," McLoughlin said.
"We have 425 staff who are still overseas; they were on holiday in India, China and the Philippines and they were not able to get back.
"With the exception of 600 or 700 senior people, who voluntarily took a reduction in their salary, we have been paying the remainder of the staff and are continuing to do so."
Dubai Duty Free has also had to deal with perishable items in its stock, some the local food bank in Dubai being a particular beneficiary to date.
"We have AED42 million ($11.5m) worth of stock that at some stage or other between now and October will go out of date. We have been managing the more recent out of date stock – we have given AED700,000 ($190k) worth to the food bank in Dubai. It was a nice way to deal with it," McLoughlin said.
"We are assessing what we will be out of date in June and see what we need to do with it. We also contributed from our foundation AED7 million ($1.9m) to Department of Health (The Fund of the UAE: Homeland of Humanity) to help with the purchase of required equipment."
Looking to the future, McLoughlin said "it will take a long while to catch up to the existing level".
"In our case, the traffic through Dubai Airport was 89 million people. There are now estimates in place that traffic in the current year might be 28 million people. Based on our record in the past, our sales this year could be just short of AED3 billion. Our sales last year was AED7.4bn," he said.
"We have 5,935 staff in Dubai Duty Free. The last year we had sales of AED3bn was in 2005 and at that time we had just under 3,000 staff. So we’re discussing this internally at the moment and seeing what changes we can make in our shift work and our timing. We have a complete freeze on recruitment and on overtime. We also await the directive we get from the government regarding the number of people," McLoughlin added.