2003: Business - Airport shops fly in face of downturn

Searching for that just-so Tommy Bahama silk floral shirt for your winter golf escape to Doral? Feeling guilty about returning home from a golf vacation without a small gift – say, a logoed ball or a keychain – for the kids?

Rick Lillie and Jeff Sailer have you covered.

Lillie is the man behind the ubiquitous PGA Tour Shops that have sprung up in airports around the country over the past decade. By spring, when four new stores will be open, there will be 41 Tour Shops, making it the largest branded airport-based retail concept in the nation, according to Lillie.

While Atlanta-based Paradies Shops has been developing the PGA Tour Shops for the past 12 years under a license from the tour, Sailer is a relatively new competitor. Two years ago, his San Antonio company, News and Gift Shops International, opened its first In Celebration of Golf store, licensing a popular retail concept developed by former Marriott executive Roger Maxwell. The shop in Phoenix’s Sky Harbor International Airport exposes travelers to an eclectic and expensive mix of products such as golf-themed chess sets and slippers that look like golf spikes.

To outsiders, Lillie and Sailer might seem to be in the wrong business. Air travel still lags behind pre-Sept. 11 levels. Security is time-consuming, and new regulations prohibit them from selling equipment. Golf sales continue to stagnate. And there’s that nagging problem called the U.S. economy.

But Lillie and Sailer are feeling bullish.

The reason for their optimism: dwell time. Security hassles have prompted travelers to arrive at airports earlier, leaving them more time to linger at shops inside security, which has become the preferred location for retailers like Lillie and Sailer.

Said Lillie: “If you have more dwell time, you have more time to shop.”

And shop they do. The costs to operate in an airport are much higher, and include a minimum guarantee paid to airports. But the return is greater. Sailer said the average traveler last year at Sky Harbor’s Terminal 2 spent $1.86 before boarding. That translates into sales of $814 per square foot, which dwarfs the $225 per square foot at a typical off-course golf shop.

While airport sales have yet to rebound to pre-Sept. 11 levels, Lillie and Sailer said they’ve been enjoying double-digit gains in same-store sales in recent months.

The bulk of their business is attributable to apparel sales. Maxwell said clothes account for 55 percent of his airport sales, and Lillie is tweaking his stores to look more like better men’s specialty shops.

“Five or six years ago, who would have guessed you could sell a Tommy Bahama shirt in an airport?” said Lillie.

He hopes to open an additional three to four stores in the second half of the year if he secures attractive real estate. Meanwhile, Sailer plans to open In Celebration shops in the San Antonio and Houston airports by June 1. If those two fly, “we could see five to 10 more in the next two years,” said Sailer. “Every major airport in the country wants this concept.”

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