DFS chief on its new Venice store and why Hong Kong luxury sales boom is over

In October, luxury travel retailer DFS Group opened its first European store, in Venice, to much fanfare. Housed inside a 13th-century building at one end of the Rialto bridge over the Grand Canal, the store is the biggest luxury retail space in Venice and a statement of intent from the Hong Kong-headquartered company that it seeks to expand beyond airport duty-free stores.

“It was a transformative moment,” says DFS chairman and chief executive officer Philippe Schaus of the decision to open in Venice. “We are based in Hong Kong so going to a space like that in Europe is big. We went from Pacific Rim to truly global players.”

Creating the Venice store, called T Fondaco Dei Tedeschi by DFS, took two years and was a complex process thanks to the history of the site and the need to be sensitive to Venice’s unique architecture.

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The company employed as architects and interior designers Rem Koolhaas, Jamie Fobert and Philippe Starck to adapt the site. Given the trio’s renown, the project garnered a great deal of press and critical attention.

“Of course they are stellar names, but we needed stellar names because the challenge itself was so complicated. You need architects of that quality to preserve the integrity of the building but also to allow it to have features of the 21st century,” says Schaus.

The opening of the Venice store in such a prominent location, which followed that of a DFS store in Siem Reap in Cambodia earlier this year, is the most gilded manifestation so far of the retailer’s strategy for change – one brought about by a slowdown in its traditional core markets.

Schaus, 53, has been running DFS since 2012, and has seen both the highs and current lows of luxury retailing.

“Let’s be frank, the last five years have been bumpy, especially the last two or three years, and that’s because there’s been a change in the customer, a change in the environment and that change, I think, is here to stay,” he says.