Travel Markets Insider / February 21, 2000
By Larry Luxner
Brasif Duty Free expects to recover most of the losses suffered in the wake of last year's crippling currency devaluation.
According to managing director Samuel Kauffman, Brasif's sales dropped from $290 million in 1998 to $190 million last year, though revenues are expected to climb back to $250 million in 2000.
"We feel good about 2000," said Kauffmann. "We think we'll probably be able to recover 75% of our total losses. The company is still maintaining all our investment plans. We are investing $10 million this year in duty-free, up from $4 million in 1999."
Controlling an estimated 97% of Brazil's duty-free market, today operates 17 stores throughout the country, including two outlets at São Paulo's Guaralhos International Airport that are being enlarged from 720 square meters apiece to 1,600 square meters.
The company also operates a 1,400-square-meter arrivals shop at Rio de Janeiro's Galeão International Airport, and shops in Belo Horizonte, Porto Alegre, Campinas, Recife and Brasília. The company's São Paulo operations are the most profitable, largely because of the high passenger volumes.
At present, arrivals account for 70% of Brasif's business, while departures are only 30%. Approximately 85% of Brasif's shoppers are Brazilians making purchases on their way back into the country from abroad. Of the remaining 15%, noted Kauffmann, most come from Europe or elsewhere in Latin America; very few are U.S. tourists.
The average expenditure at Brasif is around $25 -- down substantially from previous years. In an effort to boost sales, Brasif opened its first duty-paid store in January 1998 at Congonhas Airport, São Paulo's domestic terminal; the second one was inaugurated in October 1998 at Rio de Janeiro's Galeano International Airport, followed by a third outlet at Santos Dumont, Rio's domestic airport.
Two big duty-paid shops opened last August at São Paulo's Guarulhos International Airport, and in December 1999, Brasif opened its first off-airport store in Brazil on the ground floor of Brasif's downtown Rio.
The 186 square-square-meter store offers brand-name and designer pens, perfumes, sunglasses, watches and other gift items -- but no liquor or cigarettes. The clientele is mostly executives and secretaries working in this busy downtown location at the center of Rio's financial district.
Brasif also opened its first duty-paid store in the United States last month and will probably open a store in Orlando next year.