MILAN – The challenging economy impacting the luxury industry and the travel retail sector is leading DFS Group to close the commercial activities of the Fondaco dei Tedeschi store in Venice.
The sprawling unit first opened in 2016 and was at the time the first DFS store in Europe.
In a statement on Friday issued from DFS’s Hong Kong headquarters, the group said the “difficult decision” was made after “careful consideration” and that it would not renew the lease that ends by September 2025.
It is also a move that is “part of a global restructuring” of DFS and pointed to “very difficult” results out of the Venice store.
DFS is aiming to keep the store during part of the first half of 2025.
“In this transition phase, our primary goal is to minimize the social impact for our dedicated team,” the statement said. “We are committed to keep our employees informed throughout the process, working closely with the unions and with the relevant authorities,” as the closure will impact 226 employees.
DFS Group is a Hong Kong-based travel retailer. Founded in 1960, its stores are present in major global airports and in the heart of the city centers and is majority-owned by LVMH Moët Hennessy Louis Vuitton.
It is part of LVMH’s selective retailing division, which — alongside Sephora — includes Le Bon Marché, Samaritaine Paris, La Grande Épicerie de Paris and 24S. The branch registered sales of 8.63 billion euros in the first half of 2024, up 3 percent in reported terms and 8 percent on a like-for-like basis versus the same prior-year period.
Just as changes are sweeping through the C-suite of LVMH, most recently shaking up its wine and spirits division, DFS Group is in a transitional phase.
As reported, Benjamin Vuchot, chairman and chief executive officer, is leaving DFS and was succeeded on an interim basis by Ed Brennan on Nov. 1.
In 2023, the global travel retail market generated $72 billion, up 18 percent year-over-year. Beauty remained the largest category, making 36 percent of the whole, at $25.8 billion, according to Generation Research.
Venice has been impacted by the lack of tourists from China following the pandemic, a cluster that is now traveling to Japan and the Asia-Pacific region. The yen has been weak against the euro, which has also discouraged Japanese spending in Italy.
According to the Altagamma-Bain Worldwide Luxury Market Monitor 2024 presented in Milan on Wednesday, global luxury spending is expected to reach sales of nearly 1.5 trillion euros in 2024, a 2 percent decrease compared with 2023.
The Fondaco dei Tedeschi store opened with high expectations and a lot of media attention , also given its unique location, in a 13th-century building restored by the owner, the Benetton family’s Edizione, with Rem Koolhaas and his architectural studio OMA. The interiors were designed by Jamie Fobert, celebrating the city’s treasures via carpets, tapestries, displays and fixtures that incorporated elements of Venetian art and architecture in a subtle way.
Over the years, it has carried brands ranging from Gucci and Burberry to Bulgari, Max Mara, Ferragamo and Cartier, to name a few.
Fondaco dei Tedeschi looks onto the Rialto Bridge on the Grand Canal, and the landmark building was originally a trade house for silk and spices between East and West. With 75,600 square feet of retail space, it is the second-largest building in Venice.
From its earliest days as a warehouse and marketplace for German merchants through to its time as a customs house under Napoleon and its most recent incarnation as the Venice post office, the building has always been a place where people gather. When a fire destroyed the site in 1505, it was rebuilt in the Palladian style using classical Roman principles of construction.
