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NEWS Last modified on October 3, 2014

Heathrow agrees contract extension with WDFG

Heathrow Airport has agreed a new six and a half year extension of a retail contract with the World Duty Free Group (WDFG) to operate stores at its five terminals.

In 2013, WDFG's duty free contract at the world’s third busiest gateway generated more than 20% of the firm’s revenues, and it takes the contract concession it has at Heathrow up until November 2026.

According to investment bank Nomura, WDFG has paid £10 million ($16 million) for the extension, and as part of the agreement it has also made a commitment to make an additional €40 million capital investment over the extended contract.

WDFG recorded sales of €455.6 million at Heathrow in 2013, which represented 46.7% of the group's total revenue in the UK and nearly 22% of the global sales, from the 38 stores it operates, which includes a mix of specialist retail and core category stores.

Reports also claim the Italian firm says it plans to cut costs by an additional €25 million to €30 million through closer integration of its Spanish and British operations, a switch over to a single IT system and a more efficient warehouse network.

WDFG has operated at Heathrow since 1997.

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