King Power to Close Three Downtown Duty-Free Stores Amid Restructure
Thai retail giant King Power is set to shutter three of its city duty-free branches by September, offering a voluntary redundancy scheme across all operations as it adapts to challenging post-pandemic sales
- King Power will close three of its downtown duty-free stores—Srivaree, Pattaya, and Mahanakhon—starting in September 2025.
- The closures are a result of prohibitively high operating costs and an unviable business structure, prompting the company to explore new models for the locations.
- As part of the restructure, the company is offering a voluntary redundancy scheme to reduce staff and remain competitive, with employees from closing stores able to fill vacancies elsewhere.
King Power, Thailand's prominent duty-free retailer, is preparing to close three of its downtown outlets starting September 2025, according to its Chief Executive Officer, Nitinai Sirismatthakarn.
The affected branches are King Power Duty-Free Srivaree, King Power Pattaya, and King Power Mahanakhon.
Nitinai informed Thansettakij that the initial closures are driven by prohibitively high operating costs. The company intends to explore and implement suitable new business models for these locations in the future.
Following these closures, King Power will maintain three downtown duty-free branches: King Power Duty-Free Rangnam, King Power Duty-Free One Bangkok, and King Power Duty-Free Phuket.
"The closure of these three branches is partly due to their unviable business structure," Nitinai explained. "Another factor is the need to 'lean' our staff to remain competitive in a changing landscape. We're taking this opportunity to offer a voluntary redundancy scheme across all branches."
He added that "top-up" financial compensation, beyond statutory labour law severance, would be offered based on an employee's length of service.
This approach allows staff from the closing branches to fill vacancies created by voluntary departures from other locations, acknowledging that "sales have been low since COVID-19."
Meanwhile, discussions surrounding King Power's airport duty-free contracts with Airports of Thailand Plc (AOT) are ongoing.
Nitinai noted that AOT plans to engage two state universities to conduct studies on these contracts, a move he welcomed as it provides AOT with an independent "check and balance" mechanism. King Power's primary expectation is a "standardised conclusion" that sees it treated by AOT in the same manner as other concessionaires.
AOT had previously provided King Power with concessions, allowing for partial deferred payments and extended deadlines for minimum concession fees across several upcoming periods.
These included June to October 2025 for Suvarnabhumi Airport (with June's payment specifically deferred by six months), September to October 2025 for Don Mueang Airport, and July to October 2025 for Phuket, Chiang Mai, and Hat Yai airports.
Under these arrangements, King Power is required to pay interest at a rate of 8.8440% per annum (calculated as MLR+2) on the deferred amounts, in line with prior measures for outstanding concession fees.
AOT's review confirmed that King Power's existing contract guarantees sufficiently cover these deferred fees, even including an 18% penalty rate for any payment defaults.
To further reassure AOT of their collaborative problem-solving efforts, King Power has agreed to provide additional contract guarantees and confirmed it would make partial payments as per the agreement, along with interest on any delayed payments under the extended payment scheme. This all unfolds whilst awaiting the outcomes of the studies and analyses aimed at optimising duty-free operations to suit the current economic climate.
