Los Angeles Business Journal

Loser in LAX Concession Competition Files Protest

By James Rufus Koren Thursday, July 19, 2012

The fight for duty-free stores at Los Angeles International Airport started in earnest on Thursday, with Swiss retailer Nuance Group alleging airport staff improperly favored rival DFS in its bid to hold on to airport shops.

Airport staff last week ranked DFS, a subsidiary of Paris luxury company LVMH Moët Hennessy Louis Vuitton S.A. that has operated duty-free retail shops at LAX for more than 30 years, above seven other bidders for the 10-year contract. Nuance was ranked third.

Lawyers for Zurich’s Nuance argue that Los Angeles World Airports, the city agency that runs LAX, changed bidding rules to favor DFS.

The protest calls DFS’ projection of $4.35 billion in duty-free sales over the next decade unrealistic, arguing that the figure is $1.1 billion higher than the next highest bid.

L.A. City Attorney Carmen Trutanich’s office must review the protest and determine whether it has merit before LAWA can move forward and award the concession contract. Thursday was the deadline for bidders to submit protests of the staff recommendation.

Airport spokeswoman Nancy Castles said LAWA had no comment. Representatives for Nuance and DFS could not be reached for comment.