Duty-free sales boosted by weak dollar

Over the past month, the US currency weakened by 4.5% against the shekel to an exchange rate of 4.11.

By SHARON WROBEL
September 3, 2007 07:56
2 minute read.
duty free b.w.  88 224

duty free b.w. 88 224. (photo credit: Ariel Jerozolimski)

 
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Duty-Free James Richardson had a strong summer, generating $80 million in sales aided by a weak US currency and an increasing number of tourists. "The growth in 2007 summer sales was a result of the increase in the number of Israelis and tourists traveling abroad on the one hand and on the other hand the weakness of the dollar, which made duty-free purchases more attractive," said Avi Ben-Hur, CEO of the Duty-Free James Richardson chain, who noted that the sales were a 22 percent increase over last summer's level. "We expect this growth trend to continue during the High Holiday season." Over the past month, the US currency weakened by 4.5% against the shekel to an exchange rate of 4.11, which was partly a result of the downward trend of the dollar against the basket of currencies, said economist Gilad Cohen at Gaon Investment House. "The strength of the shekel against the dollar is partly driven by the expectations that the US Federal Reserve will cut interest rates and the central bank [Bank of Israel] will raise interest rates," said Cohen. From the beginning of the year, the US currency has weakened by 1.2% against the shekel. Looking ahead to the end of the year, economists at Leader Capital Markets forecast the dollar-shekel exchange rate will hold at 4.10 as basic economic indicators support the local currency. Meanwhile, Ben-Hur noted that the duty-free chain was investing NIS 2m. in public campaigns in preparation for the holidays. "During the months of the High Holidays, about half a million passengers are expected to pass through the airport terminal, which is 10% more than last year," said Hagit Bachar, vice-president of marketing at Duty-Free James Richardson. According to estimates prepared by the duty-free chain, more than 150,000 Israelis and tourists are expected to buy perfumes and cosmetic products during the holiday period. Among the most popular perfume brands sold last year among women were Chanel's Coco Mademoiselle and Dolce & Gabbana's The One, while among men Giorgio Armani's Code and Yves Saint Laurent's Le Homme led sales. More than 70,000 Israelis and tourists are expected to purchase personal care products and about 100,000 Israelis and tourists are projected to buy chocolate products such as Toblerone and Mozart balls with marzipan. At the same time, some 100,000 Israelis and tourists are expected to buy at least one bottle of alcohol and 10,000 are expected to purchase cigars at the airport duty-free shop.

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