Gebr. Heinemann is focused on targeted growth in MEA, Bernard Schlafstein tells GTR Mag
In early 2024, Heinemann won the concession to operate stores at Jeddah’s King Abdulaziz International Airport in Saudi Arabia, a new joint venture with JAH Arabia International Duty Free via partners Jordanian Duty Free Shops and the Astra Group
During its earnings call in April this year, Gebr. Heinemann announced it was “very satisfied” with its financial performance in 2023. The company reached €3.6 billion (US$3.9 billion) in turnover compared to €2.9 billion (US$3.2 billion) in 2022, representing a 25% jump. At that time the company said it was due to taking “important strategic steps in order to diversify the business.” Regional sales highlights include joint venture operations in Turkey and Israel, which reached US$1.1 billion and US$500 million respectively in 2023, despite geo-political headwinds affecting these locations.
Bernard Schlafstein, Director Sales Middle East and Africa, Gebr. Heinemann
MEA hub
These strategic diversification plans will continue to focus on the Middle East and Africa (MEA) region, where Heinemann recently won the retail concession at Jeddah Airports and for stores aboard AROYA, the first cruise ship for Cruise Saudi, both due to launch in 2025.
MEA accounts for almost one third of Gebr. Heinemann’s overall turnover, with the company active in retail and distribution businesses across over 40 countries in the region. “This is a great basis to leverage further growth potential for our business in the Middle East as well as in Africa across all sales channels,” confirms Bernard Schlafstein, Director Sales MEA.
According to Airports Council International, airports in the Middle East are expected to handle 1.1 billion passengers by 2040. This represents a significant increase of nearly 300% from the region’s traffic in 2019 (405 million passengers). Significant investments in infrastructure are required to accommodate this growth, says Schlafstein. “Already today, countries in the region are making large investments in constructing new airports. This outlook, combined with an attractive spend per PAX in the region, provides several opportunities for travel retail,” he comments.
A key driving factor for Heinemann’s ongoing global planning is staying close to partners and customers. To be well connected within MEA, the company recently strengthened its local Dubai hub, headed by Oleksandr Shevchenko, Head of MEA Dubai Multi Commodities Centre. “This way, we are able to strengthen our existing partnerships, as about 70% of customers from Africa have their offices in Dubai, as well as increasing potential new customers,” says Schlafstein.
In Istanbul, Heinemann has strong partnerships in place with two local joint-ventures Unifree Duty Free and ATÜ Duty Free
Eyes on Saudi Arabia
One highlight in H1 2024 for Schlafstein was the concession win for Jeddah’s King Abdulaziz International Airport in Saudi Arabia, a new joint venture with JAH Arabia International Duty Free via partners Jordanian Duty Free Shops and the Astra Group. “Teams are now working on bringing our vision for this airport to life. In August we took over operations and started construction. The official opening will take place in Q2 2025,” he says.
Schlafstein has high expectations for increased performance in Saudi Arabia, which he considers a dynamic development market. The tourism sector is a key part of the country’s “Vision 2030” and its aim for annual visitors was recently increased to 150 million by 2030.
The government is planning for strong growth in its aviation industry. By 2030 the country wants to deliver service to about 300 million passengers per year and be connected to 250+ destinations. The plans include key infrastructure projects like the new Riyadh-based King Salman International Airport, which will have a capacity of 120 million passengers. In addition, a new NEOM International Airport is being developed to serve the Red Sea developments in the north-west of the country.
Based on these figures, Schlafstein expects passenger numbers to rise, along with an increase in travelers targeting Saudi Arabia as a destination. “This is very promising for the travel retail business at [these] airports. In addition, on the regulatory side, the country is making progress, as the recent decision to allow arrivals duty free shows,” he says.
Schlafstein also sees growth potential for other sales channels: in border shops and in the cruise business. “Our colleagues from the cruise department are already looking forward to starting the operation aboard the country’s first cruise ship, AROYA,” he adds.
Schlafstein is also pleased about the company’s tender win in Antalya, Türkiye. “We are proud that our joint venture partner, ATÜ, has been selected as the next duty free operator for Antalya Airport. ATÜ will manage a total of 12,000 square meters, featuring core duty free stores, ATÜ’s multi-brand concept Luxury Square, and the local concept brand Old Bazaar. With an operational network that already spans 21 airports and cruise ports across seven countries, our JV partnership with ATÜ puts us in an ideal place to bring industry expertise, know-how, and highly qualified human resources to Antalya Airport,” he says.
Africa rising
Heinemann is active in 35 countries in Africa, and Schlafstein believes the market has unprecedented potential. “A key driver will be the significant increase in purchasing power expected for Africa’s middle classes in the years to come. This overall development, combined with the growth of the aviation industry across the continent, will provide great opportunities for the travel retail industry at airports,” says Schlafstein.
Inflight and border shops are also on Schlafstein’s growth plan. “We have already established a solid footprint for our distribution business to border shops, and we see a huge potential for further growth in this channel,” he states.
Schlafstein is convinced the company will benefit from its openness to different business models and partnerships in Africa. “We are always keen in supporting our customers to provide state-of-the-art duty free shops and offers to travelers. Therefore, we are happy to share our expertise as a globally operating company in fields like shop design or category management and at the same time we are benefiting from their expertise on local conditions or local business practices,” he concludes.
