Colm McLoughlin has overseen Dubai Duty Free during its meteoric rise over the past 30 years.
Irishman who has guided Dubai Duty Free looks back with pride
Colm McLoughlin has got a real retailer’s head for figures. He can reel off sales statistics from years back, and give you a detailed numerical breakdown of the state of affairs in the business he has run for the past 30 years, Dubai Duty Free.
“I remember we took Dh161,000 on the first day of trading in 1983, and the first full year it came to US$20 million,” he recalls.
Perhaps the reason those statistics are so memorable is because of the huge contrast with the current figures. Now DDF is the biggest airport retailer in the world; it will turn over more than $1.8 billion this year; and is one of the most successful businesses the emirate of Dubai has ever created, in a very competitive list.
Later this month, DDF will celebrate its 30th birthday in a splurge of publicity and a few marketing stunts. Some of the products on sale at Dubai International Airport will be priced at 1983 levels, for example.
But for the executive vice chairman Mr McLoughlin, the occasion will be a cause for reflection and sober satisfaction that the business he set up all those years ago has turned into such a money-spinner for Dubai.
“I was one of 10 people hired from Aer Rianta [the retail arm of the Irish airports authority] and we were asked to come over to help set up a duty free operation in Dubai. I imagined it as a six-month project but here I am still, 30 years on, and although I never expected it to be so long I’ve been thrilled by the success,” says the 70-year-old Irishman.
He is one of a small band of Irish citizens who have made a significant contribution to the economic development of the UAE. The Irish are good at retail, and the leisure business, and travel, and all these ingredients came together in DDF.
“We virtually invented the duty free concept in Ireland, back in the 1940s. Shannon Airport was the last stop on transatlantic flights from Europe, and the airlines took the opportunity to refuel and stock up on things they might need for the long flight,” he explains.
But it is a long way from that concept to the multibillion-dollar business based at DXB. Any traveller using the airport at any time of day cannot help but notice that the retail business is buzzing 24 hours. To get to your flight gate you have to pass through one of the huge retail concourses strategically placed between immigration control and departure gate.
Unusually, because of the absence of restrictions on nighttime flying at DXB and Dubai’s location as a hub for the global aviation business, the early hours of the morning are often the busiest. Passengers waiting for the transfer between London and Sydney, with a few hours to kill, are inevitably lured by the offers on display.
Some 66 million people go through the airport every year, and nearly half of them spend on average $47 in the duty free shops. It is a captive market, and a lucrative one.
Think duty free and you usually think liquor, but consumer habits have changed over the years. Perfumes and cosmetics are now the biggest seller, with jewellery and confectionery also big revenue earners.
There have, of course, been challenges. Mr McLoughlin recalls: “We opened during the Iran-Iraq war, then went through two Gulf wars, the Sars outbreak and of course the 9/11 attacks. It’s hard to address those kinds of events directly, but we’ve tried to limit the damage, for example, by discounting in troubled times.
“But even during the financial crisis, our worst year showed 3 per cent growth. We froze recruitment for a time, but there were no job losses and no wage cuts,” he explains.
DDF’s employment record is another source of pride. “There was probably around 100 people back in 1983 when we started, and we still have 44 of them with us. Great people,” he says.
DDF is part of the Investment Corporation of Dubai, answerable to Sheikh Ahmed bin Saeed Al Maktoum, chairman of the Emirates aviation group. “He has been a superstar in the whole thing, and because we’re owned by the Government it’s all been planned and approved at the highest level.”
Profit and loss figures are not disclosed, but experts agree DDF must make a sizeable contribution to the Dubai exchequer. There has been some speculation from time to time that Dubai might realise some of that value in the form of a stock market listing, but Mr McLoughlin says: “It’s never been seriously discussed. I think there’s a concern about losing control of the business if that were to happen.”
Future plans are ambitious. DXB is “busting at the seams” he says, and the potential at Dubai World Central is enormous. “Where will we be in five years? I think we’ll have 9,000 employees, turning over $3bn, and operating from two of the busiest airports in the world.”
Will Mr McLoughlin still be running the show? “I still enjoy going to work at 70, and get huge satisfaction out of it. I’ll stay as long as Sheikh Ahmed wants me,” he says.