LVMH’s DFS Group Sells Hong Kong, Macau Business to China’s CTG for Up to $395M

Luxury travel retailer DFS Group has agreed to sell its Greater China business to China Tourism Group Duty Free for not more than $395 million as the LVMH unit continues to downsize.

CTG Duty Free, which is listed on both the Hong Kong and Shanghai exchanges and is controlled by state-owned China Tourism Group, will acquire DFS’s two stores in Hong Kong and seven stores in Macau as well as exclusive rights to use DFS brands in Greater China, according to separate announcements by LVMH and CTG Duty Free on Tuesday.

The deal also involves a memorandum of understanding between the trading parties for retail collaborations in Greater China and a share subscription arrangement through which LVMH and the family of one of DFS’ founders will acquire a combined 0.57 percent stake in CTG Duty-Free.

“This move will further expand CTG Duty-Free’s service network across the Greater Bay Area, aiming to build a platform for promoting China-chic brands globally and establish an international business mid-platform,” said Luke Chang, executive director and president of CTG Duty-Free, in a statement.

China Goes Global

More than half-owned by China Tourism Group, CTG Duty Free ranks as the country’s biggest travel retailer with a 79 percent market share, and will be adding all of DFS’s stores in Hong Kong and Macau, except for its City of Dreams operations in Macau, under the terms of the deal. The transaction  is expected to be completed in around two months’ time.

The DFS stores targetted in the deal saw their total net profit plunge about 87 percent in 2024, to RMB 127.6 million, after yielding RMB 965.15 million the previous year, according to CTG Duty Free’s statement. The portfolio’s performance improved last year, with net profit of RMB 133.4 million in the first three quarters. 

All leased properties, the stores were valued at a total of RMB 3.13 billion ($441 million) as of September 2025.

DFS’ two Hong Kong stores – a location on Canton Road in Tsim Sha Tsui and a Causeway Bay venue – were valued at RMB 496 million by JLL, based on their revenue, after having failed to achieve stable profitability in the past two years.

Data from Hong Kong’s Tourism Board show the city received 49.9 million visitors last year – down 23 percent from the market’s 2018 peak – while per capita spending by overnight visitors remains about 20 percent below pre-pandemic levels. DFS closed its Tsim Sha Tsui East store last August in the face of declining sales.

The Macau stores, which include the Shoppes at Londoner Macau, a location at the Galaxy casino, and five other venues, were valued at RMB 2.64 billion.

CTG Duty Free’s Chang has termed the transaction a significant step in accelerating its international business and in implementing its Greater Bay Area strategy.

“DFS’s well-established presence and operational excellence in Hong Kong and Macau is an achievement we take great pride in. The experience will be enhanced by the new skills and perspectives that CTG Duty Free will bring,” DFS chairman and chief executive Ed Brennan said.

Scaling Back

While divesting the DFS Greater China business, the Paris-based parent of Hennessy, Louis Vuitton and Tiffany has agreed to an MOU with CTG to further collaborate in Greater China in areas including sales, store establishment, brand promotion, and cultural communication. 

LVMH is also subscribing to HKEX-listed shares in CTG Duty Free –  equivalent to a 0.35 percent stake in the company – at HK$77.2 each. The family of DFS co-founder Robert Miller, who are also divesting their stake in the retail chain through the transaction, will acquire a 0.22 percent stake in CTG Duty Free under the same terms.

DFS has faced operational headwinds in recent years due to lackluster post-Covid travel and spending from Chinese consumers, a key shopper base.

The sale of DFS’ Hong Kong and Macau assets comes as the company prepares to close its 50-year-old duty-free operation in Guam by March, with the retailer also set to exit the Hawaii market after 63 years. Last year, DFS ended its nearly 30-year presence in New Zealand and Australia.