Duty Free Americas’ owners – brothers Simon, Jerome and Leon Falic – are taking their company to new heights with a new wave of projects and expansion plans for the family business, which was originally acquired in 2001, a month after 9/11. Since then, DFA has become a leading player in the travel retail market.
In fact, 18 years since the acquisition, the brothers have turned the company into the 11th biggest travel retailer in the world (as measured by The Moodie Davitt Report’s Top 25 Travel Retailer rankings), the biggest player by far in the North American duty free market, and the most diversified in the Americas, with stores across multiple geographies and channels, including Panama, Brazil, Puerto Rico and along the U.S. borders with Mexico and Canada.
A lot of this growth comes in the aftermath of the 2009 economic crisis, when DFA reviewed and reached out to a group of banks, including IDB, for a line of working capital financing. Initially six banks were part of the group, which has now consolidated to two.
“IDB put a stake in the ground from the start saying, ‘we’re committed to you,’” says Timothy McCloskey, DFA’s U.S.-based CFO. “IDB has been with us every step of the way – they’ve grown with us – and we’ll be forever grateful to them. With their highly personal approach and commitment, IDB is just a great partner for us.”
With this ongoing support, DFA was able to successfully weather the tough economy, strengthen its foundations and seek new growth opportunities.
“IDB put a stake in the ground from the start saying, we’re committed to you.”
“One of our ongoing goals is to be a more exciting, world-class retailer, from design and store fit-out to space management to unparalleled service,” says Simon, including plans for an upgraded look at Miami International Airport.
“We are temporarily closing and renovating four of our largest stores in Miami,” Jerome explains, “creating additional space for exciting new brands, and trans-forming them into a more interactive and exciting shopping experience for our customers. Our view is that what happens in Miami can become the template for other stores across our airport network.”
This effort includes some streamlining in North America as under-performing luxury brands make way for more beauty, liquor and confectionery. “Our focus today is on fewer, larger stores,” Simon explains.
And while DFA is predominantly an Americas retailer, it is expanding overseas beyond its existing markets. In a new terminal at Tocumen International Airport in Panama, for example, DFA will not only run one of the two duty free concessions, but also news and gifts and several food and beverage outlets. “Wherever we operate duty free stores, we like to diversify into other categories as much as possible,” Leon says.
Along with fine-tuning existing retail operations, the family is also focusing on expanding the business beyond the company’s 225 duty free store locations by staying open to promising opportunities. Consummate deal makers and investors, the Falics develop and manufacture fragrances and cosmetics for a variety of fashion and celebrity brands, serve as distributors for beauty and liquor products, and run a big e-commerce business selling duty paid liquor, as well as other property and business interests.
In this regard, the brothers will likely acquire new brands under the Falic Fashion Group name and possibly other acquisitions in the travel retail world to strengthen its already powerful position in the Americas. In doing so, this entrepreneurial family is willing to take some chances for long-term success.
“Our story is the tale of a family that took a risk in buying a U.S. duty-free chain a month after 9/11, when we were only known for having previously owned a national perfumery chain,” says Simon. “We’ve always taken what we thought were sensible risks, and now our business is much bigger, different and more exciting. And IDB has played a significant role in helping us in the U.S.”
In addition to DFA’s remarkable growth, the story now includes the brothers’ children, Joseph, Dov, Miro and Samuel, who are or soon will be playing their part in writing the next chapter, a reflection of their deep love for the company their fathers established.
“It’s not just about being the biggest in our core regions, but to be among the very best in the world,” Simon explains. “We are always willing to listen and learn from brand owners and other business partners, and now we will see the next generation starting to make their contribution.”