LONDON — After detailing plans to open a store in Venice in September, the luxury travel retailer DFS Group on Friday said it will open an upscale T Galleria store in the vicinity of another World Heritage Site, in the town of Siem Reap, Cambodia, near the temple and archaeological site of Angkor Wat.
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The 86,111-square-foot store will be located in downtown Siem Reap, a short journey from Angkor Wat, which was the site of the Khmer Empire from the ninth through to the 15th centuries. The unit is set to open in early 2016.
During an interview here on Friday, Philippe Schaus, chairman and chief executive officer of DFS Group, which is majority-owned by LVMH Moët Hennessy Louis Vuitton, said he believes the store will be well placed to attract the attention of the millions of tourists who flock to the site each year. “There are already more than a couple of million tourists going there [a year], and it’s going to be six million by 2020,” said Schaus. “It is becoming a major destination in Southeast Asia, with a luxury-goods consumption-savvy [demographic of] Japanese, Korean and now Chinese [visitors] going there in big numbers.”
Schaus noted that although the luxury market has “come to a little bit of a plateau” in some territories and that luxury labels are hesitating to open stores, the brands who take up residence in the Siem Reap store will have the attention of “a culturally savvy, luxury-goods-savvy consumer.”
“What has hindered the brands from going to a place like this so far is, there was no real estate where they would consider going,” said Schaus. Located in the middle of busy Siem Reap in the same building as the Angkor National Museum and near the Raffles Grand Hotel d’Angkor, the store would be “an oasis” that provides an upscale shopping opportunity that is now missing from the town, he said. Not only that, visitors tend to linger in the town, typically staying there for four days, he said. The store also would offer duty-free shopping, which Schaus said would mean a “savings proposition” for traveling consumers.
According to Schaus, another attraction of the store is that there is little for visitors to do in the town once they have seen the Angkor Wat site. Due to the country’s stifling temperatures, tourists typically visit the site early in the morning and return to their hotels before midday.
Schaus believes Chinese and Japanese visitors to the store will be the highest spenders and forecasts that its annual sales could reach “several hundred million [U.S. dollars]” once the store has been established for “a couple of years.”
While the brands that will be in the store haven’t yet been confirmed, Schaus said the mix will include “major fashion brands, watch brands and the entire community of beauty brands.” He noted that Asian customers at the store would likely focus on luxury labels, while European and U.S. customers tend to buy luxury products “in their home country.” For those shoppers, he said, T Galleria has partnered with local producers to offer handmade, “high-quality, locally crafted” items.
As to plans for other T Galleria stores, Schaus said the firm will continue to look in Europe for “the right real estate,” which includes “places…where we feel there is the right customer but not the right offer.” DFS is also in the process of remodeling its City of Dreams T Galleria store in Macau, renovating its T Galleria store in Sydney and revamping its store in Saipan.
The Hong Kong-based DFS Group operates luxury travel retail locations in both its downtown T Galleria stores and in airports. It is part of LVMH’s Selective Retailing division, along with Le Bon Marché and Sephora.
Looking at the growth prospects for travel retail, Schaus said that while there are “constantly moments when one nationality…will not travel as much or will not spend as much,” he feels the “underlying trend” is positive. He noted that outbound travelers from China, a country he described as being “by far the most important” driver of growth in travel retail, exceeded 100 million this year and that the World Tourism Organization expects that figure to be 200 million in 10 years. “The underlying mechanics are very positive,” said Schaus.