This week, a look at an emerging, private-jet-focused, beauty business opportunity. Plus, the question surrounding Mytheresa’s rumored Net-a-Porter buy, and highlights from Glossy’s “State of Luxury” series.
Six months after being named president of the travel retail company Duty-Free Holdings, fashion industry veteran James Mullaney has defined a five-year plan to grow the company — currently doing $200 million in annual sales — to a $500 million business by 2026. The vision includes accelerating the growth of a new business division catering to private-jet travelers and boosting skin-care, cosmetics and fragrance sales to at least 30% of the business in the next year. Alcohol is currently dominating sales, followed by tobacco.
“Other than the fragrance category, I was surprised that the [beauty] business was as big as it was,” Mullaney said, regarding adjusting to his new role after working in fashion, in top leadership positions at brands including Furla, for over 20 years. “There’s a very big market for cosmetics and skin care. And it could be a big, big growth driver for us.”
Also set to be a major growth driver is Duty-Free Holdings’ Executive Retail Shops, which it introduced in early 2023 to bring the duty-free shopping experience to private jets and small executive airports.
Because the company is an early, “disruptive” retail player in the “fixed-based operator” space, serving planes, Mullaney said scaling the business has been logistically challenging. “Providing the best experience possible means constantly having the fresh products [travelers] want and being able to deliver those products,” he said. Pulling that off has meant opening a second distribution center, in San Diego, supplementing the company’s Miami center, as well as strengthening relationships with suppliers, among other partners.
Time is of the essence, Mullaney said. “Once you’re the first to start doing something, everybody starts to jump in. In this business, if you wait, you’re dead,” he said. As such, he’s currently building out his team to support his big plans while keeping them in motion. A competitor, Duty Free Americas, is projecting $2.1 billion in 2024 revenue.
But already, Executive Retail Shops services 3,300 annual flights, selling products averaging $180 in price to travelers spending an average of $2,500 per transaction. Its website, from which customers can place orders for products they want to be stocked in their private plane, features fragrances by Tom Ford, Versace and Marc Jacobs, among others. When Glossy spoke with Mullaney on Tuesday, he had just wrapped a meeting with Estée Lauder Companies about “getting some of their higher-end brands online and in stores with us,” he said.
“It’s the higher price points that really drive the [Executive Retail Shops] business; you’re not going to find lower price points here,” he said. “We’re delivering a luxury lifestyle experience that’s a lot more elevated.”
That’s compared to Duty-Free Holdings’ “La Boutique” airport stores and its border stores targeting travelers to and from Mexico and the Caribbean. Both business units are growing, with two new airport stores opening by the end of the year, in Sheltair Aviation in Fort Lauderdale, and 10 more next year. In 2025, the company will also open a new border store.
Executive Retail Shops serves high-net-worth travelers, many of whom have multiple international flights per day, Mullaney said. Often, it’s their assistant, not them, placing the orders to then prep their plane. They’re buying everything from fragrance gifts to $6,000 bottles of Louis XIII cognac for the trip, Mullaney said.
There’s new opportunity around private-jet travelers as they become more abundant thanks to dedicated charter companies, including Next Jet and Silver Air, sprouting up. As Mullaney noted, instead of buying first-class tickets, 12 girlfriends may now decide to split a $15,000 private flight to their destination.
It’s also a promising time for Duty-Free Holdings’ other divisions. Airports including JFK, LaGuardia and Newark have recently undergone or completed renovations resulting in the availability of more experiences. As a result, more travelers are partaking in airport offerings, filling their hours-long wait times with dining in high-end restaurants and shopping in premium stores.
To promote its Executive Retail Shops to wealthy potential customers, Duty-Free Holdings has enlisted a marketing agency plus a PR firm and has begun co-hosting events in private airports with its cosmetic and fragrance brand partners. In addition, it’s sponsoring events providing desirable alignment — next week, it will co-host a charity golf outing with private jet company W Aviation and Italian alcohol company Campari.
Duty-Free Holdings, founded and owned by Phillipe Dray, has been in the duty-free business for over 30 years.
Will Mytheresa buy Net-a-Porter?
Earlier this week, it was reported that luxury e-tailer Mytheresa is nearing a deal to acquire the struggling, Richemont-owned Yoox Net-a-Porter. The deal would make Mytheresa the largest luxury e-commerce site, based on volume. But is that what the company wants? Mytheresa has long prided itself on its streamlined curation of products, limiting its number of brands and maintaining a focus on occasion-perfect products. In addition, the experiences it provides its customers offsite are a key differentiator.
On a call with Glossy earlier this week, Heather Kaminetsky, president of Mytheresa North America, stressed these priorities:
“At Mytheresa, we’re extraordinarily focused on Mytheresa. There are certain things about our business where we just don’t budge. Profitability remains a focus. Product curation remains a focus. We are really strict in the way that we onboard brands, analyze their performance and then exit brands. We’re very, very focused on our product curation. In our operational efficiency and the services that we provide the customer — just in the transactional e-commerce element — we’re very focused. We’re constantly looking at our NPS scores. We’re constantly talking to customer care. We’re constantly reevaluating our communications. … There’s a lot of work done on our brand relationships, which goes back to our product curation, from the exclusives to the capsules — all with a focus on: How do you best service the customer? We’re an e-commerce platform, but we focus so strongly on building our customer community of luxury enthusiasts, and that’s done off the website. On the website, obviously there’s content, there’s beautiful styling — but it’s definitely more transactional, and the amount of emphasis and focus that we put onto our community of luxury enthusiasts everywhere is so sharp. That really is what we’re focused on, time and time again — and that continuous focus on these messages is really what sets us apart.”
In its full-year 2024 earnings, reported in September, the company reported an annual sales increase of 10% to $927 million and $29 million in earnings before interests, taxes, depreciation and amortization.
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