BRENNAN APPOINTED CHAIRMAN OF DFS
Byline: Kristin Young
LOS ANGELES — Edward J. Brennan, president and chief executive officer of San Francisco-based DFS Group Limited, was named chairman of the 40-year-old international duty-free retailer, whose parent company is luxury giant LVMH Moet Hennessy Louis Vuitton.
The move means that Myron E. Ullman III, who had held the chairman title even after being named LVMH group managing director in July 1999, will cede it to Brennan, who has been at DFS since 1997. Ullman will continue to serve on the DFS board. LVMH acquired a majority stake in DFS in 1997.
Brennan was traveling and could not be reached for comment.
“In the past two years, DFS Group has returned to profitable growth, thanks in large part to Ed’s leadership, expertise and energy,” Ullman said in a statement. “Ed has played an integral role in bringing Miami Cruiseline Services into the LVMH fold after the acquisition a year ago.”
As chairman, Brennan will join the LVMH executive committee and will have greater responsibilities in LVMH’s Travel Retail operations unit, said a spokesman. The unit includes DFS Group’s stable of about 150 duty-free airport shops and general merchandise stores, as well as Miami Cruiseline Services, a Miami-based company that provides duty-free shops to 26 major cruiselines. LVMH acquired Miami Cruiseline Services last January.
DFS Group, known for its focus on the Japanese customer, is currently in the throes of change. A spokesman said the company experienced a reduction in sales and profits in the late 1990s due largely to the Asian economic crisis.
DFS’s global revenues fell from $2.7 billion in 1995 to $1.4 billion in 1999. Sales in 2000 rose to $1.8 billion. DFS does not disclose profits.
Other factors contributed to the sales malaise, as well.
“Duty-free shopping doesn’t have the appeal it once had as tax laws have changed and trade barriers have come down,” said a DFS spokesman. “The nature of the Japanese traveler has changed, including the fact that prices at home are not that different from what they find abroad anymore. DFS has found ways to provide value to Japanese shoppers in other ways. There’s a real hunger for fashion brands, and because of high import tariffs, they get significant discounts on some of these brands.”
In the past few years, Brennan and Ullman have attempted to broaden the company’s customer base by opening several DFS Galleria retail concepts in the U.S. aimed at both international and domestic travelers. There are currently four such concepts, including locations in San Francisco and Beverly Hills, Calif.; Las Vegas, and Honolulu. DFS plans to open a 40,000-square-foot Galleria concept at Hollywood & Highland, a huge retail and entertainment complex slated to open in Hollywood, Calif., this year. DFS has also expressed interest in other cities, such as Miami.
A total of 13 DFS Gallerias are currently operated in Asia, the Pacific Rim and the West Coast of the U.S.
The Galleria concepts range between 50,000 and 100,000 square feet in size and feature three main components: high-end fashion boutiques such as Louis Vuitton or Celine, a section devoted to tobacco, accessories and cosmetics, and an entertainment concept such as a restaurant or an area where local souvenirs are sold.