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Store Brand Licensing Takes Flight at Airports image

Store Brand Licensing Takes Flight at Airports

Store brand licensing is taking off in airports as travel and tourism slowly regain their footing.

The number of U.S. airline passengers rose 83% last year to 670 million. That was down from more than 920 million in 2019, but the return of travelers to airports has been enough to spur new store brand formats.

For example, Stellar Partners will open its first Buzzfeed newsstand in Delta Terminal at La Guardia Airport in New York in April, combining magazines, newspapers and grab-and-go food and beverages with Buzzfeed licensed products, said CEO Padraig Drennan. Stellar Partners operates 182 stores under brands including Ron Jon, Tumi, and Swarovski. At the same time, Hudson Group has opened automated kiosks in Myrtle Beach, NC and other airports under B. Robinson’s Revo (eyewear), Bluestar Alliance’s Brookstone, and other brands. Additionally, Hudson is expanding its 2,000-sq-ft. “Evolve” format, which combines Brookstone and other travel accessories brands with local touches like Dallas Cowboys merchandise at the Dallas Love Field Airport in Dallas.

“These have become billboards for brands in many markets and they also help distinguish us from others retailers in a given airport,” Drennen said. “There is a brand affinity around news and convenience, and when someone knows a brand they feel comfortable dealing with it. More companies are supporting their brands in given marketplaces since everything is done to the standards of the brand itself.”

These new concepts and formats are arriving at airports as the travel industry struggles to right itself after a pandemic-induced shutdown that has slowly begun to ease. For example, Stellar has re-opened nearly all its stores and annual revenue in 2021 returned to “close to” 2019 levels of $260 million, Drennen said.

In the case of Dufry Group, which operates duty-free stores and owns Hudson Group, 84% of its 1,850 stores have re-opened and revenue was at 55.6% of 2019 levels in the third quarter ended Sept. 30, CEO Julian Diaz said. And Paradis Lagardère – which operates under CNBC, Univision, Today, and other brands for newsstands – said that while revenue was up 97% in the fourth quarter ended Dec. 31, it was down more than 30% from 2019.

In most cases, sales at domestic stores were stronger than those in international markets, which wasn’t surprising given the downturn in business travel. At Macy’s, which focuses on international tourism, sales to international travelers in the fourth quarter were down 50% from 2019 due largely to the emergence of the Omicron variant and it won’t gain back the lost revenue this year, CEO Jeff Gennette said.

“From everything we are seeing, 2022 is going to be a very active year across the board and we are almost up to 2019 levels at many airports, but the international business is lagging and hasn’t come back yet,” Drennen said. “Airports continue to be sought-after real estate for retail and you just have to make sure you have the right type of brands that are appropriate for the consumers at the given terminals.”

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