The global travel retail channel stands out as a unique and highly valuable sector for investment due to several distinctive elements:
- High Footfall Locations: Travel retail outlets, such as airports and cruise terminals, attract millions of travelers from around the world. These high-traffic locations offer a captive audience, providing a significant advantage for retailers and brands.
- Diverse Customer Base: Travelers come from diverse backgrounds and regions, making it an excellent opportunity for brands to showcase and sell their products to a global customer base. This diversity allows for exposure to new markets and customer segments.
- Duty-Free Shopping: Duty-free shopping presents a tax-saving opportunity for travelers, making it an attractive proposition for consumers. This can result in increased spending, especially on luxury and high-end products.
- Luxury Focus: The travel retail sector has a particular allure for luxury brands. High-end fashion, cosmetics, and accessories are popular choices for travelers seeking prestige and exclusivity.
- Pre-Travel and Post-Travel Purchases: Travel retail encompasses both pre-travel and post-travel shopping. Passengers often make purchases before departing, and again upon arrival, creating multiple touchpoints for brands to engage with customers.
- Digital Transformation: The industry’s digital transformation has led to innovative shopping experiences, such as online pre-order and collection services, enhancing convenience for travelers and increasing sales.
- Global Trends and Regional Preferences: Brands can tailor their offerings to reflect global trends while also respecting regional preferences. This adaptability allows for customized strategies in different locations.
- Resilience and Growth Potential: While the COVID-19 pandemic had a temporary impact on travel retail, the industry has shown resilience and is poised for a strong rebound as travel restrictions ease. It remains a high-growth sector, particularly in emerging markets.
- Brand Exposure: Travel retail locations offer brands a unique opportunity to create brand awareness and engage with customers who may not have encountered their products otherwise.
- Longer Dwell Times: Travelers often have longer dwell times at airports or cruise terminals, providing more time for shopping and exploration, making it easier for brands to capture attention and influence purchasing decisions.
Sixth Continent Fund
The Sixth Continent Fund represents a dynamic and specialized approach to investment, honing in on the global duty free and travel retail markets.
It recognizes the unique commercial opportunities of the channel and capitalizes on it by strategically investing in companies and assets operating within the duty free and travel retail space. The fund is guided by a team of experts with deep industry knowledge, allowing it to identify promising opportunities and navigate the intricacies of this specialized market.
Investments may range from equity stakes in: Airport retailers, F&B duty free operators, specialized service- & technology providers, and brands with a (potential) unique channel fit allowing them to realize sizable industry presence.
Key Objectives
Capitalizing on Market Growth
As global travel continues to expand, the duty free and travel retail sectors exhibit strong growth potential. The fund seeks to benefit from this growth by investing in companies that are well-positioned to tap into this rising consumer demand.
Diversification
The fund diversifies its investments across different segments of the duty free and travel retail markets, reducing risk and enhancing the potential for attractive returns.
Enhancing Passenger Experience
By supporting companies that provide innovative and high-quality products, the fund contributes to the enhancement of the overall passenger experience in airports and other travel hubs.
Global Reach
The Sixth Continent Fund operates on a global scale, taking advantage of opportunities in duty free markets across continents and regions. This broad approach ensures exposure to a wide range of travelers and markets.
Long-Term Value
While seeking attractive short-term returns, the fund focuses on building long-term value by nurturing investments that can thrive in the evolving landscape.
Global Travel Retail / F&B
Geographically diversified investments on the intersection of global mobility and consumerism.
As the world of travel steadily recovers and evolves, global travel retail emerges as a promising investment channel, offering a unique blend of diversity, innovation, and resilience. This sector presents an unmissable opportunity for forward-thinking investors to be part of a thriving marketplace that is adaptable, culturally rich, and constantly evolving.
Bain & Company
“… Airport retailers face the biggest disruption to their business since the industry’s inception—one that will rapidly redefine winners and losers. To thrive in the coming decade, airport retailers need to change not only how they sell but what they sell. …” (link)
Kearney
“… An industry consensus is forming around the idea that, to regain growth and customer spending, travel retail must pivot its value proposition from being price-/value-centric to being traveler-centric. … ” (link)