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Estée Lauder, Head of Journey Retail, WWD

PARIS – Estee Lauder Cos. has excessive hopes for journey retail.

The group has simply opened a brand new state-of-the-art distribution middle devoted to the worldwide channel positioned within the hilly space of ​​Galgenen, Switzerland, close to Zurich. The multi-story, sustainably managed facility spans 300,000 sq. toes and doubles the corporate’s journey retail operations.

Right here, automated robots work alongside people in big rooms the place bins snake on conveyor belts. The futuristic, 65-foot-tall, 11-aisle steel mesh warehouse can retailer greater than 340,000 trays of bins.

“That is being carried out to make sure the longer term development of Estée Lauder’s journey retail enterprise,” mentioned Fabrizio Freda, President and CEO of Estée Lauder Cos., throughout an unique interview with WWD in Galgenen.

He defined that the positioning can also be designed to raised serve retailers by growing not solely volumes but in addition the standard of shipments.

“[It makes] we’re assured that we can extra successfully adapt to completely different retailers and the wants of various markets,” mentioned Freda. “That is the important thing concept. It’s also a strategy to put together to serve this development in a properly organized and complex means.”

Journey retail, which incorporates duty-free outlets at airports, metropolis centres, airways, cruise outlets and border outlets, has been the toughest hit retail channel throughout the coronavirus pandemic. When the well being disaster hit in early 2020, journey got here to a whole halt in most elements of the world, inflicting gross sales in journey shops to plummet.

Estee Lauder Cos.  Distribution center Galgenen.

Estee Lauder Cos. Distribution middle Galgenen.
Cortes Estee Lauder Cos.

Previous to the COVID-19 pandemic, journey retail gross sales had been $86.3 billion in 2019, up 9.8 % year-over-year, based on Technology Analysis. Of those, perfumes and cosmetics made up the most important product class, valued at about $37.6 billion, up 20.1% year-over-year.

A survey by Technology exhibits that between 2024 and 2025, duty-free distributors ought to typically attain pre-COVID-19 gross sales ranges. Nonetheless, at Estée Lauder, the restoration was sooner.

“Regardless of the pandemic and quite a few airport closures world wide and journey restrictions, the retail channel has grown for us,” mentioned Freda. “Our retail journey enterprise is considerably bigger right this moment than it was in 2019.”

Journey retail, which usually reaches over 3 billion customers a 12 months, is among the group’s quickest rising retail segments.

In fiscal 12 months 2021, Estée Lauder Cos. the tourism retail enterprise generated 28 % of its complete gross sales.

The expansion was primarily pushed by enterprise in China and specifically Hainan Island, which has turn out to be a tax-free haven for home Chinese language vacationers who aren’t allowed to go away the nation as a part of the federal government’s “COVID-19 zero”.

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