The Moodie Davitt Report
Lagardère Travel Retail Pacific and Australian travel retailer AWPL announced today that they plan to form a joint venture, effective from 1 January 2022.
The 50:50 JV, titled Lagardère AWPL, will embrace each company’s operations in Australia and New Zealand including duty free, food services, travel essentials and specialty retail.
The merger is subject to Australian Competition & Consumer Commission (ACCC) clearance and will be completed upon that statutory approval.
By joining forces and merging their businesses, Lagardère Travel Retail Pacific and AWPL aim to maximise opportunities in their recovery from the impact of the COVID-19 pandemic and achieve market leadership to better serve the needs of partners, landlords and travellers in the Pacific region.
By combining their complementary strengths, the partners said they are confident they can deliver a comprehensive offer to all customers using the best elements of an international group and a highly-recognised, local family business.
Lagardère Travel Retail and AWPL have operated alongside each other for decades in the region, and share the same values of the importance of people, operational excellence, trust, innovation & long-term vision, the companies said in a statement,
Subject to final documentation and local regulatory approval, Lagardère AWPL will regroup all operations from both partners in Australia and New Zealand, including duty free, food services, travel essentials and specialty retail.
Lagardère Travel Retail Pacific CEO Przemek Lesniak and AWPL Founder and Managing Director Costa Kouros are appointed co-CEOs of the new company.
All Lagardère Travel Retail Pacific and AWPL staff – totalling 850+ people – will be transferred into the new entity.
Lagardère Travel Retail CFO and Lagardère Travel Retail Pacific COO Luc Mansion said: “The COVID crisis has fundamentally changed market dynamics and opened the door to consolidation opportunities, notably in the Pacific which has been one of the hardest-hit regions. By joining forces with AWPL, we are bringing the ‘Stronger Together’ motto to life and giving ourselves the best chance to thrive beyond the recovery.
Lagardère Travel Retail Pacific and Nestlé last month extended the retailer’s exclusive partnership with KitKat Chocolatory by launching a KitKat Chocolatory Mix Your Break range within the Relay store at Cairns Airport’s domestic terminal
“We’re thrilled to have come to an agreement with the AWPL ‘family’, a highly respected partner who not only complements our strengths but also shares the same strong values with us. Together we are confident that we can dramatically improve our ability to support our landlords’ ambitions and create unique experiences for travellers as we step into this new journey.”
Lesniak said: “I am confident that our planned joint venture with AWPL is great news for our people, landlords and partners as we continue our recovery. By coming together, we can play a leading role in rebuilding and growing the strong and vibrant Pacific travel retail industry through a unique commercial offer and greater innovation. I look forward to working with Costa, our teams, and our partners to make this exciting proposal a reality.”
Kouros commented: “The last 18 months have challenged travel retail on a global scale. The intention of this joint venture is to bring together two great businesses – our heritage, our people, our values – so that we create something special in our region for many years to come. The customer will be at the heart of everything we do, every decision we make.”
Newslink Pty Ltd started operations in Australia in 1990, before becoming part of Lagardère Travel Retail in 2001. Lagardère Travel Retail then expanded the business to New Zealand in 2011. The company now operates 130+ stores across travel essentials, duty free & fashion and food service in 20 airports and four railway stations and cultural centres, including the Sydney Opera House and Royal Botanic Gardens.
Family business AWPL operates over 50 travel retail stores in Australia and New Zealand, dubbing itself ‘The Heartbeat of Travel Retail’ in the region. AWPL said that its connection to supply and airport partners, friends and supporters is what creates its ‘magic’.”
Comment: This is not simply a consolidation play in a distressed market – although it was driven by those factors – but a partnership that has all the makings of a long-term winner, writes Martin Moodie. Since stepping into the Australian and New Zealand markets with the acquisition of Newslink in 2001 Lagardère Travel Retail Pacific has quietly but impressively gone about expanding its regional footprint across its multiple pillars of duty free, food services, travel essentials and specialty retail.
In AWPL it finds an entrepreneurial partner built by the ebullient Costa Kouros, as respected as he is popular in the region for the values he and his family bring to the sector and to airport partnerships.
In December 2019, we named him one of The Moodie Davitt Report’s People of the Year, noting that in 2020 awpl would celebrate its 25th anniversary, a period in which it had grown into Australasia’s leading destination merchandise retailer, operating over 50 stores on both sides of the Tasman Sea notable for their championing of local suppliers and producers.
Those 2020 celebrations would turn horribly sour soon afterwards due to the advent of the COVID-19 pandemic which has had a devastating impact on international air traffic in both countries.
But the words we wrote still ring true. “Outside its home region, awpl is largely unknown, largely because the company founded by Costa Kouros in 1995 has remained a family business focused on delivering results rather than talking about them. In an industry which too often pays lip service to the vital role that quality destination merchandise plays in the tourism and travel retail sectors, we think that should change.
“To create, sustain and grow a business of this excellence and focus over a quarter of a century in what has often been a volatile region, commercially speaking, is an outstanding achievement.
“And while awpl is far more than the Costa Kouros story, it is the founder and archetypal entrepreneur who we recognise here for his success in shaping a business based on a compellingly simple philosophy – ‘Our ultimate aim is to leave every customer with a positive and memorable feeling.’ The Kouros family heartbeat is healthier than ever.”
The events of 2020 and 2021 may have caused that heartbeat to skip a little (make that a lot) but today, as news of the joint venture with Lagardère Travel Retail Pacific rings out around the world, its only fluttering will be that of excitement.