Gebr Heinemann - The Moodie Report

October/November 2006 TENDER ANALYSIS • Copenhagen Airport
Gebr Heinemann
pledges new concepts and
brand-led approach at Copenhagen
In this special section we assess some of the big tenders of 2006, beginning with
Gebr Heinemann’s dramatic victory in the duty free tender at Copenhagen Airport.
When the German retailer takes over the concession next year, what stamp will it
put on retailing at one of Europe’s key travel retail locations?
More events, a bigger profile for brands and a
range of new high-end concepts: those are
just some of the plans that Gebr Heinemann
has lined up for Copenhagen Airport, the latest location
in its retail portfolio. The German wholesaler and retailer
takes over the main duty free contract from The
Nuance Group on 1 March 2007, under a six-year deal.
And it’s a prospect that Gebr Heinemann is relishing.
“Copenhagen is a challenging airport close to our headquarters.
We look forward to working with a professional
team there,” said Gebr Heinemann Co-owner Gunnar
Heinemann on hearing the news last August.
Since then the company has been busy laying out plans
for the main duty free store’s conversion to a 2,900sq m
walk-through shop, aided by the airport’s move to a central
security zone. It will also take over four smaller stores
and an Arrivals outlet.
The retailer pledges “stronger, more consumer-oriented
events in all product categories”. Of those categories,
expect beauty to shine at Copenhagen just as it does at
Frankfurt or its other large retail locations. Expect a new
approach too, based on category management princi-
Liquor in the main tax free store – expect a new
high-end approach to a critical category
Henrik Busch:
“We recognise
there is a story
behind the
products on
the shelves”
ples, to growing areas such as toys and accessories. The
company says it will deliver a new high-end Line of Luxury
approach in liquor and tobacco, and it will follow up
the success of its Airport Specials concept, first launched
at Frankfurt International Airport, with similar events
surrounding new and exclusive products.
The airport authority too is excited about the prospect of a
new retail partner, and the approach to brand activity promised
by Heinemann strikes a chord with Copenhagen Airports
Vice President Commercial Affairs Henrik Busch. He
says: “We are already a well-branded airport. Although we
are also volume driven we recognise there is a story behind
the products on the shelves, which the brands have invested
millions in. We need people to see the logos and feel the
brands’ presence, as well as find what they want easily.”
Busch was impressed by the Heinemann attitude to the
bid process. “On the commercial side it was great to see
how their top management and their owners participated
in the process,” says Busch. “That convinced us they
were focused on the operation here. And we have seen
at Heinemann’s other operations that they believe in a
high level of events, so that will impress our customers.
We’ll see a more high-profile presence from the world’s
top brands. The layout and plans they presented take
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October/November 2006 TENDER ANALYSIS • Copenhagen Airport
into account the needs of Copenhagen, which is very
different from a Frankfurt or an Oslo.”
Once Heinemann has put its own stamp on the retail
there, travellers won’t confuse Copenhagen for anywhere
else: the retailer says creating a distinct Sense of Place is
a core part of its strategy.
The short distance between Copenhagen and Heinemann’s
Hamburg base will also help in supplying the
operation. That was one of several compelling factors in
choosing Heinemann, says Busch: “Heinemann provides
us with a big understanding of the retail value chain;
they are experts in areas such as space management and
order replacement. Another key issue was their buying
power, which is proven. And as an old retailer myself, it
was good to see their understanding and appreciation of
the downtown market, particularly in Copenhagen.”
Without an understanding of that downtown market, and
the forces that drive Danish and Scandinavian consumers,
Copenhagen’s new duty free retailer would be operating
in the dark. That regional travellers have lost some of their
faith in Nordic travel retail is no secret. And all regional
travel retailers face serious issues of consumer confidence.
A Nordic Travel Retail Group-commissioned study earlier
this year from research group Kjaer and Schmeltzer
found that there was deep disillusion among some passengers
about the price and value proposition. That disillusion
applied to airports, airlines and the ferry business.
Nordic Travel Retail Group Chairman Erik Thomsen
says: “The latest Nordic Travel Retail Seminar in May
showed that we still have a long way to go before a majority
of travellers find travel retail attractive and are willing
to spend more money in our shops.”
That’s the context in which Heinemann enters Copenhagen
– a location in which its predecessor The Nuance
Group struggled to make money – but its success in
Norway suggests that it will be equal to the challenge.
When its Travel Retail Norway joint venture took over
duty free at Norway’s international airports on 1 January
2005, it embarked on a series of initiatives that dramatically
improved the fortunes of the duty free business.
On day one in Norway the retailer slashed prices by
between -5% and -23%, depending on the category,
which it said was necessary to “re-establish trust in
prices” among Norwegians. It streamlined the supply
chain using its expertise in logistics, and created what it
calls a “high performance culture” among staff. Its challenge
now is to manage growth effectively – 2006 sales
There is a role for an enhanced fashion and accessories
offer at Copenhagen Airport, says Henrik Busch
will be double those of 2004 at well over €200 million.
That growth has been bolstered by the introduction of
Arrivals duty free in July 2005 – a move that has hit other
Nordic airports serving Norwegians, with Copenhagen
possibly worst affected. It will be intriguing to see how
the retailer manages Copenhagen’s Norwegian business.
But both Gebr Heinemann and Copenhagen Airport
believe they can make money, especially with the forthcoming
expansion of space. Busch says: “The financial offer
is a good deal for the airport and we’re very happy and confident
with what we’ve seen. For Heinemann, they have
proved themselves to be good businessmen. I’m quite sure
they will deliver a contract that makes money for them.”
And, typically understated, Gunnar Heinemann adds:
“We won’t get rich, but it’s a business that should provide
us with a good result – and, more importantly, provide
Copenhagen Airports with a good result.”
Duty free retail isn’t the only commercial area preparing
for a facelift. The airport plans to develop a further
5–6,000sq m of space in the next two years.
“We want to expand the shopping centre and we’ll add
more speciality retail and food & beverage,” says Busch.
“I have a list of 110 brands that want to come in, but we
have to assess what the customer wants.” So what does
Busch, as a retailer himself, want to see?
He replies: “I believe there is room for more outlets for
women’s clothing and accessories, and children’s products
too, but the survey will help us assess our future needs.
We capture 57% of customers in the stores today, so
there is plenty of room for improvement.” ■
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