Swiss Travel Retail Giant Avolta Continues Its Expansion in Asia

The deal marks Avolta’s entry into the Japanese duty-free market and raises a question: why is LVMH divesting itself of an asset located in one of Japan’s most dynamic tourist destinations?

The agreement covers DFS’s operations at Naha Airport as well as the DFS Galleria Okinawa, the island’s main duty-free shopping center. Okinawa welcomes several million Japanese and international visitors each year and benefits from a steady flow of tourism, supported by its strategic location between mainland Japan, China, Taiwan, and South Korea. In recent years, the Okinawa Tourism Bureau has been particularly active in promoting the archipelago as the “Japanese Tropics.”

The Swiss group Avolta, which operates more than 5,000 retail locations in 70 countries, currently generates nearly 13 billion Swiss francs in annual revenue. The Asia-Pacific region accounts for approximately 20% of its revenue. According to the company, DFS Okinawa generated revenue in 2025 equivalent to nearly 10% of Avolta’s Asian operations. Avolta would therefore have the opportunity to immediately launch a profitable and well-established business in a market known for being difficult to enter. The transaction is financially attractive for Avolta, which states in its press release that it will be financed using its available cash and that the impact on its debt will be limited.

For LVMH, the rationale is different. DFS, a historic pioneer in luxury duty-free in Asia, has been undergoing a restructuring phase for several years. The consequences of the pandemic, the slowdown in Chinese tourism, and the rise of domestic luxury spending have significantly impacted the business. As early as 2024, LVMH had already acknowledged that DFS was one of the businesses most exposed to the unpredictable vagaries of international tourism.

Bernard Arnault’s group now appears to be prioritizing a strategy of refocusing on its most profitable businesses, pursued by strengthening its investments in flagship brands and streamlining certain weaker peripheral assets.

This acquisition also demonstrates how Japan’s appeal in the travel retail sector is moving upmarket. As the country enjoys a record influx of foreign visitors and a yen that remains favorable to tourists, global travel retail players now view the Land of the Rising Sun as one of the key growth hubs for the next decade.