s reasons for the exit. But scratch beneath the surface, and a more layered story emerges.  LVMH’s quiet pivot For parent company LVMH, the DFS closures are part of a broader recalibration. While its Selective Retailing division, which includes DFS and Sephora, posted 6 per cent year-on-year growth last year to US$32.7 billion, that performance was largely driven by Sephora. DFS has lagged behind, especially in struggling markets like Hong Kong and Macao, which were once its crown jewels. In response, LVMH has embarked on a quiet realignment: shuttering underperforming stores in Saipan and Venice, divesting assets such as its stake in Paris’s La Samaritaine and reallocating resources toward more promising markets in Asia and the Middle East. DFS’s Oceania withdrawal is the latest in a series of calculated retreats. A missed window on China However, the timing of DFS’s departure has raised eyebrows, particularly as travel from China to Oceania begins to rebound. Chinese tourists have been a cornerstone of Australia and New Zealand’s inbound tourism economy and a driving force in luxury retail spend. According to an announcement by Prime Minister of Australia Anthony Albanese, Chinese tourism is growing at a faster pace than other international markets, with a 26 per cent increase in visitors in the past 12 months and a total of 860,000 trips to Australia.  The country is Australia’s largest tourism market by expenditure, with a total spend of A$9.2 billion in the 12 months up to March 2025. A substantial portion of that expenditure flowed through duty-free and luxury retail channels, especially in gateway cities like Sydney, Auckland and Queenstown. Chinese travellers, now more digitally savvy and experience-oriented, are returning, albeit with evolved expectations. DFS’s exit now feels like a missed window of opportunity to re-engage one of the most valuable tourist cohorts in the region. A legacy that fell behind Founded in 1960 and acquired by LVMH in the late 1990s, DFS built prestige around the “T Galleria” model. For decades, the model worked. Tourists, especially from Asia, flocked to DFS stores before boarding long-haul flights, lured by tax-free products from Dior, Gucci and Louis Vuitton. “When I first moved to New Zealand, DFS was one of the few places you could access many premium and luxury brands,” Juanita Neville-Te Rito, founder and MD at retail consultancy RX Group, said on LinkedIn. “But my recent visits to their stores still felt stuck back in 1999.” That sentiment speaks volumes. Over the past decade, access to luxury has become democratised. Flagship stores from luxury brands now anchor major malls, while e-commerce and local pop-ups have made premium brands more available than ever. What once required a passport and a DFS detour is now just a few taps or a tram ride away. “The luxury retail landscape across the world has changed. Many brands have their own presence in the region; eg, Sydney, where luxury brands such as Chanel, Gucci, Celine, Fendi and Louis Vuitton have flagship stores or are available in centres like Westfield and David Jones,” she said.  However, this might be just one of many reasons for the withdrawal of the group in this region. The retail expert also attributed the closure to the changing dynamics.  “Travel retailers are adapting to global headwinds, shifting patterns and evolving consumer expectations,” she said.  In South Korea, companies like Lotte Duty Free, Shilla and China Duty Free Group (CDFG) have aggressively retooled their approach.  “If you look at the players in Asia and my favourite South Korea, leaders like CDFG, Lotte and Shilla have invested heavily in digital platforms, mobile apps and seamless O2O [online-to-offline] shopping, raising the bar for customer experience.” Luxury’s new rules of engagement What does it take to win in luxury travel retail in 2025? For Neville-Te Rito, it’s far more than a sleek store design or tax-free signage. The rules of engagement have changed. According to the expert, leading retailers are creating in-store whisky bars, light shows, VR fragrance exploration zones and curated events that blur the line between retail, entertainment and hospitality. Meanwhile, AI now powers recommendation engines, digital concierges and real-time inventory management to enhance hyper-personalisation.  “DFS Group pulling out of Asia Pacific is a cautionary tale to those operating in the luxury travel retail sector. The days of relying on legacy brands and traditional models are over and success means being agile, digitally savvy and relentlessly focused on evolving customer expectations. For those who remain, the opportunity is real, but so is the challenge,” Neville-Te Rito said.   Further reading: Can Saks Global recoup its losses to become a profitable department store giant?