Airport Authority awards perfumes and retail licences

(HONG KONG, 19 May 1997) -- The licences for sales of perfumes and cosmetics and airside general merchandise at the new airport at Chek Lap Kok were awarded by the Airport Authority today.

The two licences, which are amongst the world's biggest airport retail concessions, have gone to Nuance-Watson (HK) Limited. This is a joint venture between Swiss corporation Nuance International Holdings and the Hong Kong-based A.S. Watson & Co., Limited.

The perfumes and cosmetics licence gives Nuance-Watson (HK) Limited the right to sell a comprehensive range of brands of perfumes, cosmetics and toiletries within Hong Kong SkyMart, the world-class shopping mall within the passenger terminal at the new airport. Nine outlets are covered by the licence with a total retail space of 957 square metres and 259 square metres of storage space. The licence term is five years.

The airside general merchandise licence gives Nuance-Watson (HK) Limited the right to sell a wide selection of merchandise within Hong Kong SkyMart. A total of 12 outlets, located in the restricted areas of the departures boarding level and representing 2,610 square metres of retail space and 837 square metres of storage space, are included in the licence. The licence term is 64 months.

"We are encouraged by the very favourable response to these two major retail licences at Hong Kong SkyMart," said Mr Raymond Lai, Finance and Commercial Director of the Airport Authority. "Together these two concessions represent a very significant percentage of our retail space and revenue. Tender submissions featured some of the best concepts and business proposals.

"This is the first time we have seen two mega operators, Nuance and A.S. Watson, putting together their major resources and extensive experience in the international duty free trade and Asian retailing into a joint venture such as this. We are very proud that they will be an important part of Hong Kong SkyMart and we have every confidence in their success," said Mr Lai.

Nuance, with the recent acquisition of Allders International Duty Free, is the world's second largest duty free operator, with over 250 shops world-wide. It has a true global presence with operations in Australasia, Europe and the United States.

A.S. Watson is well-known to consumers in Hong Kong and has a 170 year trading history. One of the largest retailers in Asia, A.S. Watson operates four major retail chains with more than 650 outlets: Park 'N Shop supermarkets, Watson's Personal Care Stores, Fortress Consumer Electrical Stores and British Home Stores Apparel/Textiles.

"Nuance-Watson (HK) Limited will be bringing to Hong Kong SkyMart the combined experience of professional international duty free operations and strong local perfumes and cosmetics retailing," said Mr Lai.

Mr Fred Chiu, General Manager, Retail of the Airport Authority, said: "With 60 per cent of its retail outlets being airport shops, Nuance is a seasoned airport retail operator and is well equipped and positioned to be a key operator at Hong Kong SkyMart."

Tenders for the two licences were invited in December 1996 and the submissions closed in March this year.

Ref. PR-274