Page 16 - IAADFS Summit 2023 Special Edition

INSIDER

“New” HKG Duty Free, under Ross Khaledi, looks to further

expansion

It is now more than a year since Ross in conversation with a smaller U.S. airport
Khaledi, founder and CEO of U.S. border that is looking for an operator that is not
duty free retailer HKG Duty Free, bought considered one of the major players.
back 100% control of the company from “They prefer dealing with someone
the group established by his family in on a more personal level; a company that
Laredo, Texas in 1977. can offer their passengers a customized
“With this ‘new’ company we will assortment, which we can do,” he adds.
grow and diversify further,” Ross Khaledi “We were offered a space, but the location
recently told TMI, as he discussed the and size did not meet our needs. We
company’s history and what he sees ahead. maintain interest and are waiting to see
Founded in 1977, the parent HK another more suitable space.”
Group began as an electronic sales
operation based in Laredo, Texas. Today, Ross Khaledi, HKG Duty Free founder Catering to a well-known clientele
H.K. Global Trading, Ltd is a successful and CEO Further down the line, Khaledi plans
limited partnership run by Ross Khaledi, to re-brand the stores, but for now, he will
with business ventures along the U.S./ keep the established name. “We first want
Mexican border that include electronics “As HK Global Trading grew, we to refresh the spaces and strengthen the
distribution; duty free stores and supplies; understood that we may someday need to current business with increased assortments
freight forwarding, in bond, transportation, separate our interests. That day came over and new brands before we take that step to
general construction and real estate a year ago, when the partners looked at rebrand,” he says.
development. each business entity and decided where our Currently, 95% of the HKG Duty
“You know HK Global Trading interests lie,” Ross Khaledi tells TMI. Free business comes from Mexico, which
as a Duty Free retailer on the southern “As business partners, we divided the has allowed the company to fine-tune its
border, but we are a much more diverse companies according to our interests. In assortments and marketing to best appeal to
company. We have construction and home addition to other divisions, I chose to move this known customer.
development and design businesses in forward with, and expand, the duty free “The person who crosses daily for
Texas and Florida. We have a finance retail division…which I plan to grow and work and knows our stores is our key
company, real estate companies, diversify further,” he continued. customer. We have a very high level of
warehousing facilities, and commercial HKG Duty Free currently operates repeat customers and have built a data base
shopping centers. We are also an Electronic seven U.S. border stores in San Ysidro due to their loyalty. Our marketing team is
authorized retailer for Samsung, TCL, and and Otay, CA, and El Paso, Laredo, (2), always experimenting with new ways to
Hisense among others,” said Khaledi. and Hidalgo, TX, Calexico, CA opening in attract customers. Promotional flyers do not
In 1998, HKG Duty Free was formed April and two airport stores in Mexico. work anymore, so we are transitioning to
to service U.S. Southern Border customers “We are researching other crossings in more digital formats,” says Khaledi.
crossing daily into Mexico. The first store TX and AZ, an additional store in the San “We are trying to focus on what a
opened in Laredo, one of the largest land Diego area, and locations on the border in customer purchased in the past, reaching
border crossings in the U.S., processing Mexico. Currently in Mexico, we operate out to them in a personal, strategic
over 15 million people each year. duty free stores in Queretaro and Puebla manner. We lead with the product of their
The company is headquartered in International Airports and are negotiating interest, and then expose them to our other
Miami, where it relocated to a 60,000 sq ft. for duty free and duty-paid spaces in other promotions.”
warehouse and offices in Medley late last Mexican international airports.” HKG Duty Free also uses its digital
year. Khaledi says that one of the platforms including QVC and HSN, to
“The new warehouse offers us better company’s goals is to expand into the cater to its electronics and small appliances
distribution opportunities,” explains U.S. airport market with duty free and customers in the U.S. market.
Khaledi. HKG also has a Laredo, TX duty paid stores. “We have an experienced
Distribution Center with a 100,000 sq ft team dedicated to researching these Differentiating the product assortment
warehouse, an In-bond team, and logistics possibilities,” he says. The top-selling categories in the HKG
operations. In fact, Khaledi confirms that they are Duty Free stores are liquor and tobacco,

Summit of the Americas April 2023 16