Hotel Shilla reportedly eyes American duty-free retailer DFASS
South Korea-based Hotel Shilla Co Ltd. has evinced interest in acquiring American in-flight duty-free retailer DFASS Group, reveal sources familiar with the matter.
If brokered, the deal will help Hotel Shilla to gain a foothold in the American retail market as it looks to expand its overseas footprint. Reuters reports that this would be the first acquisition of a duty-free operator for Shilla.
As part of this, the retailer unveiled shops in Macau and Singapore's Changi Airport last year. It is also trying to foray in Southeast Asia.
Miami-based DFASS, which operates more than 25 duty-free shops in the US, Latin America and the Caribbean as well as in-flight duty-free services, did not comment on the deal.
A Hotel Shilla official said "We have been keeping an eye on the merger and acquisition market since DFASS Group was put on sale.
"We are seeking to expand our overseas presence. But at the moment, nothing has been decided yet as to what we will do next. We will wait and see how things go from here."
Sources add that other global duty-free retailers are also eyeing DFASS.
South Korean market is dominated by big retailers like Lotte Duty Free and is seen as a market which hinders competition, with the government earmarking new licences for smaller firms.
But consumption in South Korea has recorded a dramatic rise on the back of wealthy Chinese tourists who are flocking the country.
Duty free operators earned combined 8.3tn won in revenue last year, up 21% from 2013, as per figures reported in The Korea Times. Hotel Shilla also recorded 2.91tn won revenue in 2014, up 26.6% from 2013, and 138.9bn won operating profit, up 60.5%.