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Restrictions hamper development of duty-free chain
CubaNews / September 2001

By Larry Luxner

HAVANA -- The John Bull Group, a leading retailer in the Bahamas, inaugurated a 104-square-meter luxury boutique in Havana last December, seven years after opening its first Cuban outlet in Varadero. But it doesn't plan to expand any further for the time being.

"It's difficult working here because your hands are so tied," said Mike Russell, foreign operations manager at John Bull, which has 20 outlets in the Bahamas -- specifically Nassau, Paradise Island, Abaco and Eleuthra.

"Everything has to go through the Cuban government," Russell told CubaNews. "In the Bahamas, we operate our business pretty much how we want to, but here, we're not able to do the things we want. For instance, we can't have any interaction with the staff like giving them incentives to make them want to go out and be true salespersons and sell until they can't sell anymore. That's a hindrance. We put the merchandise there and staff get paid whether they sell or they don't."

Another thing that irks Russell is Havana's constantly changing customs laws.

"Customs has taken more control of the country, and from what I understand, they're starting to tighten up on regulations and make sure everything is done by the book," he said. "They keep changing the rules and regulations to try to get back on track."

John Bull is in Cuba thanks to a joint venture with Universal, a division of Cuban state tourism agency Cubanacan. Universal operates the store and provides the employees, while John Bull provides luxury goods. The product portfolio of the new store includes watches by Rado, Gucci, TAG Heuer and Citizen that start at $60 and go as high as $400. It also offers two lines of Colombian leather goods (Carib Style and III Milenio), and generic gold and silver jewelry, as well as a line of Aztec-inspired jewelry from Colombia called L.A. Cano.

The store forms part of the Centro Comercio Comodoro, a shopping complex attached to the Hotel Comodoro that was recently expanded from eight stores to 18. Located at the intersection of Calle 84 and Tercera Avenida. the John Bull outlet attracts not only tourists but also foreign diplomats and local Cubans with access to dollars.

"Business is growing every month as people find out about us," Russell said. "This whole area is being developed with hotels and trade centers. It's becoming a real center of activity."

Russell, who declined to specify how much his company has invested in Cuba, said his only real competition is Coral Negro, a Cuban entity that sells watches and jewelry. But that chain sells Seikos and Swatches, and "they're not in the same ball park as us," he says.

"We do have a concession for perfume, but we found after a few years that it really wasn't worth continuing. If we had four or five outlets, maybe it would be worthwhile," he said. "We have to see how things go. It's been a long battle up to this point. We're just fine-tuning now. Hopefully tourism will increase enough to where people have the money to come shop with us."

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