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LAX officials award duty-free food and retail concessions contract

Tom Bradley International Terminal
The makeover of food, beverage and retail concessions at Los Angeles International Airport continued this week with the award of a lucrative contract to operate duty free shops.

Airport commissioners on Monday granted the 10-year contract with three one-year options to the DFS Group, a subsidiary of LVMH Moet Hennessy Louis Vuitton of Paris. DFS had held the duty free contract at LAX for 30 years.

The company forecast potential sales of $4.35 billion during the life of the contract. LAX officials estimate that the airport will receive about $1.45 billion in revenue from the deal.

DFS will operate duty free shops at the Tom Bradley International Terminal, which is undergoing an extensive renovation, and Terminals 2 through 7, which also offer international flights.

The company will be required to invest no less than $25 million for initial improvements at its facilities and $17 million for additional upgrades half-way through the contract period.

Duty-free shops sell liquor, tobacco, jewelry, electronics, fashion, cosmetics, confections and packaged gourmet food.

One bidder, the Nuance Group of Switzerland, filed a protest in July challenging a recommendation by airport staff to award the contract to DFS. Nuance claimed that DFS' sales forecasts were unrealistically high.

The Los Angeles city attorney concluded that the allegations were unfounded, clearing the way for the airport commission's approval of the contract. The matter will be forwarded to the City Council for a vote.

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-- Dan Weikel

Photo: Travelers inside the LAX Tom Bradley International Terminal in June. Credit: Lawrence K. Ho / Los Angeles Times

 
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