DFS Will Open a Luxury Retail and Entertainment Destination in Hainan – WWD

CANNES, France — DFS, the LVMH Moët Hennessy Louis Vuitton-owned travel retail operator, said Sunday that it is opening the first “seven-star” luxury retail and entertainment destination, in Hainan, China, by 2026.

DFS Yalong Bay is the largest project ever conceived by DFS. It is to stretch over 1.38 million square feet and carry more than 1,000 luxury brands, including those from LVMH. The site will also boast immersive concepts spanning categories such as fashion and apparel, beauty and fragrance, watches and jewelry, wine and spirits, fine dining, and food and beverage.

“To create a luxury and entertainment offer, you have to be able to juxtapose and sometimes blend the various experiences,” Benjamin Vuchot, chairman and chief executive officer of DFS, told WWD. The executive is in Cannes to attend the Tax Free World Association, or TFWA, trade show, which opens Monday.

The budget earmarked for DFS Yalong Bay was not divulged.

During the coronavirus pandemic, Hainan became the leading travel retail destination for Chinese people, and luxury brands have been flocking there. Another lure is that by 2025, the island is expected to become a free-trade port.

Hainan overall is on track to become among the largest luxury retail markets around the globe in the next five years. By 2030 alone, it is estimated that there could be more than 80 million visitors per year to the island.

DFS believes its new location there could attract more than 16 million visitors yearly by 2030.

“Luxury retail today is not enough,” said Vuchot. “We’re also bringing entertainment and a lot of additional activities to make it the place to visit when holidaying in Sanya, in Hainan.”

Sanya is on the island’s southern tip.

DFS has coined a new star appellation, saying this is meant to be a “seven-star” experience — even more luxurious than a five-star one.

“We have a pioneering spirit,” said Vuchot. “We like to go above and beyond. We’re famous for having led the travel retail industry throughout the last 60-plus years.

“We thought, with that pioneering cap, and with that spirit of elevating constantly the experience for the customers, we would bring the next generation of experiential retail in a place that is going to attract millions and millions of visitors for the years to come,” he continued.

“It’s important, of course, to anchor the project around a very, very unique collection of luxury brands, because at the end of the day the Chinese customer is still incredibly attracted by the iconic presence of the luxury maisons,” the executive added. “We will group different experiences around the product categories.”

That could be, for instance, concepts related to watches and jewelry, beauty, as well as how men want to shop.

“When you talk about beauty, we talk about wellness,” he said. “On top of that, and this is really the core of our product offering: We are going to dedicate a huge part of the property toward kids and teenagers.”

Vuchot said among the unique characteristics of Chinese consumers visiting Hainan is that they are multigenerational travelers.

“You come with your children and parents, and being a tropical place, of course you have the beautiful beaches,” he said. “So it’s important also to create a destination-within-a-destination for the tourists in Hainan. And children are an incredible opportunity for us — to give them the space to play, to have fun, and also to find merchandise that will delight and surprise their parents or their grandparents.

“It’s not been really intentionally done in the past, but we think that it will [be] a great complement to the offering that we have,” continued Vuchot, who remained mum on specific details, but shared the notion of an indoor park — “something quite spectacular, something really wild that makes sure that the kids will want to come back,” he said. “And when they come back and they’re happy, their parents are happy, and they have their playground to enjoy with us.”

Among the location’s other features will be 45 restaurants. Five minutes away from DFS Yalong Bay, the first bay developed for luxury tourism on Hainan, will be more than 12,000 hotel rooms, representing about 22 percent of Sanya’s five-star hotel capacity.

“So establishing this seven-star luxury retail and entertainment center is also matching the quality and the catchment area that we have within such a short distance,” said Vuchot, describing it as “a cluster of common values that allows people to come multiple times and they really become part of this destination-within-a-destination.”

DFS Yalong Bay will be 25 minutes from the airport.

Vuchot said the project “also is really showing our commitment to China. We’ve been very fortunate to be able to be a guide to the traveling customers around the world, and particularly to the Chinese traveling customers. But for us, having the opportunity with the free-trade port [coming], to bring in the DFS know-how and experience in the heart of Hainan is going to be very important.”

DFS is supporting the Chinese central government and the government of Hainan in further developing the island as a key destination and window into China.

“DFS Yalong Bay is the latest in a series of commitments we are making in China,” said Nancy Liu, president, DFS China, in a statement. “Yalong Bay area is undoubtedly the most developed luxury natural cove in Sanya, where DFS will provide unparalleled personalized services to our patrons. This truly represents a substantial stride in DFS’s global strategy to expand in the China market through a multiformat, multichannel expansion in the luxury travel retail sector.”

Vuchot said the new project shows, as well, DFS’s “strong determination and optimism toward what we do and luxury retail in general.”