DFS to Shut Down All Stores in Hawaii This Year
HONOLULU (HawaiiNewsNow) - In a significant shift for the retail landscape, DFS Hawaii has officially announced that it will be closing all three of its stores within the state by the end of this year.
For 63 years, DFS has been a staple in Hawaii, catering primarily to international travelers by allowing them to purchase products without incurring local import duties and taxes.
Khydeeja Alam, a visitor from California, expressed her disappointment after browsing the Waikiki store last Wednesday evening. "I thought it was wonderful," she said, highlighting the variety of brands available at the location. "It’s great to have so many options."
However, the reality is that the number of international visitors has been on a downward trend. Even prior to the pandemic, DFS had to lay off 165 employees in 2019, pointing to a decline in travel from Asia.
Jerry Agrusa, a professor at the University of Hawaii's School of Travel Industry Management, noted, "The Japanese were once our largest group of international customers, but they haven’t returned in significant numbers. Those who have come back are spending less due to a weak yen."
Although DFS has reduced the size of its store in the Waikiki Galleria, it still occupies a considerable 50,000 square feet of retail space. The company hasn't disclosed the exact number of layoffs expected, but estimates suggest it could be in the hundreds.
Dave Erdman, the interim president and CEO of Retail Merchants of Hawaii, remarked, "DFS has been a crucial retailer in Hawaii, supporting local jobs and contributing significantly to our economy through revenue and taxes."
State Representative Adrian Tam, who represents Waikiki and chairs the House Tourism Committee, shared his concerns: “What worries me most is the job losses that will affect many residents, and I’m also curious about what will happen to the vacant retail space in Waikiki once DFS leaves.”
Mufi Hannemann, president and CEO of the Hawaii Lodging and Tourism Association, stated, "It’s common knowledge that Duty Free has faced numerous challenges, so this decision likely doesn’t come as a shock to them. They might already have alternatives in mind regarding their leased spaces."
The Waikiki store is scheduled to close on January 28, followed by the Honolulu airport store, which will cease operations in late March. The final store, located at Kahului Airport, will shut down in late August when its ten-year lease concludes.
Financially, DFS has been paying at least $1.6 million annually for their Kahului location. Erdman commented, "Their absence will be felt in our market, especially as a key retailer for international visitors, and it will impact revenue generation for both Honolulu and Maui airports."
In light of decreased tourism figures, Hannemann added, "This is certainly not what we want to see, particularly as we aim for a swift recovery in Maui after the recent wildfires."
Agrusa further observed, "The overall decline in international visitors across the U.S., not just in Hawaii, can be attributed to various global political issues."
In a statement regarding the closures, DFS expressed gratitude towards its partners and committed to supporting its employees during this transition period. "After 63 remarkable years in Hawaii, DFS has made the hard choice to exit the market. We will close our Waikiki downtown store on January 28 and our Honolulu International Airport store on March 31. Our lease at Kahului Airport will conclude on August 31, with the exact final trading day yet to be determined.
Hawaii has been vital to DFS since we opened our first U.S. duty-free shop at Honolulu airport in 1962, establishing our brand as a pioneer in travel retail. Our downtown store in Waikiki has been a longstanding home for us, and we wish the best for the area’s future development.
We sincerely thank our employees in Hawaii, many of whom have dedicated many years to DFS and returned after our Waikiki store reopened post-COVID. Their commitment has been essential to our success, and we pledge to assist them through this transition.
We also extend our heartfelt thanks to our partners and customers for their trust and support over the years. The relationships we've forged here are an integral part of DFS's legacy in Hawaii.
DFS remains dedicated to providing excellent service to our customers in Hawaii until our final day of operations.
Aloha ʻoe.
