Hudson Group, a subsidiary of Dufry AG, raised $749 million by offering 39.4 million shares at $19 in its initial public offering. The company debuted Thursday, under the stock symbol HUD, on the New York Stock Exchange.
Joe DiDomizio, CEO of Hudson Group, says the move “provides for financial and operational focus and flexibility” going forward.
In an interview with ARN, DiDomizio notes that Hudson Group’s core offerings – travel essentials and duty paid retail – differ from its duty free business.
“As our business has evolved, we recognized that North America was primarily driven by the duty-paid business,” he says, noting that the markets outside of the U.S. are primarily driven by duty free, which is what Dufry’s business is built around..
DiDomizio says the Hudson Group IPO allows the company operational flexibility and “much more runway to grow” within its core business, and the money from the IPO will allow it to expand its duty paid retail offerings to more airports within North America. The company is also targeting other travel venues such as hotels, casinos and tourist destinations.
Over the past few years, the company has opened 100 stores under the new Hudson format and, overall, has invested close to $200 million in new store buildouts, store upgrades and expansions to improve the overall shopping experience, as well as other capital investments in our business to support our stores.
Dufry officials have in the past suggested interest in expanding the food and beverage side of the U.S. business through Hudson Group. While DiDomizio says an expansion in food and beverage is likely, it is secondary to growing the core retail business.
“I think you’re going to see us gradually shift, but I think we have so much more runway to grow in our existing core business that that’s going to be our focus first and foremost,” he says.
Hudson Group currently operates nearly 1,000 stores across 88 locations. The company launched in 1987 and was privately held until 2008, when it was purchased by private equity firm Advent International. Advent merged Hudson group with Dufry, and Hudson became a wholly owned subsidiary of the Swiss firm.
A more in-depth interview with DiDomizio will run on the ARN website on Friday, February 2.