LVMH sells DFS HK and Macau business to China’s CTG Duty-Free

French Luxury brand LVMH has agreed to sell its DFS travel retail business in Hong Kong and Macau, as well as its intangible assets in greater China to CTG Duty-Free, a travel retail operator headquartered in Beijing.

Through this transaction, CTG Duty-Free will acquire the DFS retail stores in Hong Kong and Macau as well as intangible assets encompassing a series of DFS brands and intellectual properties for exclusive use in Greater China. 

CTG Duty-Free will conduct the acquisition through its wholly owned subsidiary, China Duty Free International Limited. The proceeds of this transaction will be paid in cash.

The transaction is expected to complete in approximately two months. Subsequent to this, DFS will continue to run its other luxury travel retail operations across the globe.

Meanwhile, CTG Duty-Free and LVMH have signed a memorandum of understanding to forge a retail-focused strategic partnership, aligned with both parties’ core strategies and the operating models of LVMH’s Maisons.

This cooperation will offer CTG Duty-Free and LVMH opportunities to leverage their respective strengths and forge further collaborations in Greater China to achieve mutual benefits, in terms of product sales, store establishment, brand promotion, cultural communication, travel services and customer experience.

In a complementary move, LVMH and the Miller Family will participate in a capital increase of CTG Duty Free by subscribing to newly issued H-shares listed in Hong Kong. The subscription amount represents a small part of their proceeds, and the subscription will be made upon completion of the transaction.

Luke Chang, executive director and president of CTG Duty-Free, said: “This move will further expand CTG Duty-Free’s service network across the Greater Bay Area, aiming to build a platform for promoting China-chic brands globally and establish an international business mid-platform.”

Chang added, “CTG Duty Free remains committed to providing high-quality travel retail experiences to both domestic and international tourists, fulfilling its responsibility as a central state-owned enterprise-controlled listed company to support the high-quality development of the retail economy in Hong Kong and Macau.”

Ed Brennan, chairman and CEO of DFS, said: “The sale of our Hong Kong and Macau stores marks an important step for DFS. DFS’ well-established presence and operational excellence in Hong Kong and Macau is an achievement we take great pride in. The DFS shopping experience will be carried forward and enhanced by the new skills and perspectives that CTG Duty-Free will bring. We are proud of our journey in this region and grateful to everyone who has been a part of it.”

Michael Schriver, president of LVMH for North Asia said: “For decades, DFS has played a pivotal role in shaping Hong Kong and Macau into premier destinations for travel retail. As we look to the future, we consider China Tourism Group Duty Free to be the ideal partner to operate the DFS business in Hong Kong and Macau and to lead it into its next chapter, thanks to their expertise and proven track record in travel retail. This whole operation underscores our confidence in the long-term potential of the Chinese market."

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