Airport group sells duty free shops
[10th March 2008]
Airport operator BAA has sold its World Duty Free shops at its seven UK airports, which include Heathrow, Gatwick and Stansted, to Italian company Autogrill.
The sale of the 58 World Duty Free shops at BAA’s airports will raise £546.6 million for the cash strapped group. Spanish company Ferrovial took on £9 billion of debt to buy BAA and is looking to dispose of “non-core assets” to repay its debts.
Autogrill has been listed on the Milan stock exchange since 1997 and is active in the retail and food and beverage markets. Its main business is airport shops as well as shops and food outlets at motorway service stations and railway stations.
Last year Autogrill bought Alpha Airports which operates food outlets at smaller UK airports. The company is also attempting to secure majority control of Aldeasa, which operates over 200 airport shops in Spain, Portugal, Africa and Latin America. The Benetton family, of clothes shops and Formula 1 fame, owns Autogrill which already operates over 5,200 shops in more than 1,100 locations.
Under the terms of the sale, Autogrill has a concession to run the duty free stores at BAA airports – which also include Southampton airport, Glasgow airport, Edinburgh airport and Aberdeen airport – for a period of 12 years.
Airport shopping is big business for airport operators – particularly the lucrative duty free shopping for popular items such as alcohol, cigarettes and perfume – but experts believe that BAA has secured a good price for World Duty Free in the current difficult economic market.
However, the £546.6 million from World Duty Free will only make a small dent in BAA’s massive debts. The airport operator is also looking to dispose of other assets such as property, and there have even been rumours that it may try to sell Gatwick airport or one of its other airports to ease its financial position.
Written by: Nick Purdom
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