Bookseller Hughes & Hughes has landed a €70 million contract to operate as the exclusive bookseller for Terminal 5 at London's Heathrow Airport, which will handle 30 million passengers a year.
The contract will generate sales for the book chain of €14 million a year. The terminal, one of the largest building projects in Europe, will open in 2008, but the fit out of the retail outlets begins next spring. Several British booksellers had also been chasing the contract.
Derek Hughes, executive chairman of the chain, said that the contract win was great news for the company, but also for Irish retailers generally.
He noted that many British retailers had established strong positions in Ireland in recent years, so it was gratifying to see the position reversed.
The winning of the contract is likely to provide a significant financial boost for Hughes & Hughes.
The company posted turnover of €24.4 million in the year to the end of February 2005 and recorded pretax profits of almost €1 million.
The company is owned by a holding company called Circuit Line Investments. Its business is split between high-street outlets and travel retail shops based in airports.
The latter are highly lucrative for booksellers because they generally come with reasonable rents, but also benefit from strong footfall.
It is understood that Hughes & Hughes will be named as prefered bidder within days by the British Airports Authority (BAA). As part of its contract, the chain will operate two outlets, measuring 5,000sq ft in total.
The latest contract will bring to 20 the number of outlets operated by the chain in the Republic and Britain.
Hughes & Hughes already operates outlets at Dublin, Cork and Shannon airports. It also operates an outlet at London City Airport, which is owned by entrepeneur Dermot Desmond.
Some of the largest British booksellers are understood to have lost out in the tender competition held by the BAA.
While newsagents will be allowed to sell a small selection of books at Terminal 5 (known as T5), Hughes & Hughes has exclusivity apart from that.
The construction of Terminal 5 is costing £4.3 billion (€6.4 billion). It will cater for 30 million passengers annually using long- and short-haul flights.
In addition to the main terminal building, it will consist of two satellite buildings, 60 aircraft stands, a new air traffic control tower, a 4,000 space multi-storey car park and a 600-bed hotel. The main anchor airline will be British Airways.
Independent booksellers have been under increasing pressure in recent years in the Republic and this trend is likely to continue. One of the biggest chains in the world, the US Borders group, has recently entered the Irish market with a store at the Dundrum Town Centre in south Dublin. The chain is also planning to open a two-storey superstore in the West End Retail Park in Blanchardstown, Co Dublin.
The arrival of such a large book retailer could exert pressure on existing providers in the Irish market.
Eason has been expanding aggressively in recent years, having bought Reads and Fred Hanna in Dublin and opening new outlets in other cities.
Headquartered in Ann Arbor, Michigan, Borders is a Fortune 500 company with annual sales of $3.9 billion (€3.2 billion). The major supermarkets are also taking market share from traditional booksellers, with Tesco now offering a wide selection of bestsellers.
