Lagarde're Shares Reach Peak in 2025 Due to Travel Retail Boom, Yet Structural Adjustments Loom Ahead
Lagardeère Group, the French media-to-retail powerhouse, hit new heights with its share price closing at €21.90, a 10% jump on Thursday. This surge was largely driven by the stellar performance of its leading division, Lagardeère Travel Retail, the primary retail operator at Charles de Gaulle Airport in Paris. Revenue soared by nearly 16%, reaching an impressive €5.8 billion ($6.1 billion), and EBIT hit a record high of €305 million ($320 million), surging by an impressive 24.5%.
However, the titan isn't resting on its laurels. It's considering a restructuring of its North Asia operations, which make up a significant portion of its business. The duty-free business, which predominantly thrives in European airports but also includes Paradies in the U.S., following its 2015 acquisition, experienced substantial growth.
Lagardeère Group's overall revenue swelled to €8.9 billion last year, a 10.6% increase (8.5% like-for-like). Arnaud Lagardeère, the company's CEO, praised the sector, stating, "Travel retail is benefiting fully from the growth in air traffic thanks to its three complementary businesses—travel essentials, duty-free and fashion, and dining."
Lagardeère Travel Retail has expanded its operations through strategic acquisitions, such as Tastes on the Fly in the U.S., and winning contracts at major airports like Amsterdam Schiphol. With more than 5,000 points of sale globally, the division continues to grow.
During an investor call, Grégoire Castaing, the assistant managing director of Lagardeère Group since June 2024 and its financial head, noted, "Travel retail had another remarkable year," but acknowledged the challenges in the Asia-Pacific region. The Asia-Pacific sector, excluding the EMEA region and France, saw a 13% revenue drop due to weak consumer demand in North Asia, primarily as a consequence of China's economic slowdown.
Despite these challenges, Lagardeère Travel Retail started 2025 positively. Like-for-like sales in January were up by 9%. The joint venture contract with Amsterdam Schiphol, which will run for 10 years, offers considerable sales potential starting from the second quarter. However, the company is currently evaluating changes to its North Asian operations, aiming to improve profitability and adapt to the evolving market conditions.
[1]: Source: Enrichment Data (Lagardère Travel Retail's North Asia Challenges and Restructuring Plans)[4]: Source: Enrichment Data (North Asia Revenue Decline and Network Streamlining)
- Lagardeère Group's operations at Schiphol Airport in Amsterdam are managed by its travel retail division.
- Hachette Bookshops, a subsidiary of Lagardeère Group, has numerous outlets at both Paris Charles de Gaulle Airport and Schiphol Airport.
- Vivendi, a French media conglomerate, has not announced any plans for acquisitions or closures in relation to Lagardeère Group's travel retail business.
- The travel retail sector in France, including Lagardeère's operations at Schiphol Airport in Amsterdam and Charles de Gaulle Airport in Paris, experienced robust growth last year.
- Paris Charles de Gaulle Airport, like Schiphol Airport in Amsterdam, offers extensive airport shopping opportunities, contributing to the growth of Lagardeère Travel Retail.
- The potential revenue from the joint venture with Amsterdam Schiphol, which will run for 10 years, is crucial for Lagardeère Travel Retail's growth strategy in Europe.
- Lagardeère Group's financial head, Grégoire Castaing, mentioned the challenges in the Asia-Pacific region during an investor call, but the company is exploring ways to improve profitability in North Asia and adapt to market conditions.
