COMPANY PROFILE: BAJA DUTY FREE

Baja Duty Free opened its doors in 1989 at a 1,000- square-foot store in San Ysidro. By 1999 the store had increased in size to 5,500 square feet and another expansion is underway that will almost double the duty-free store to about 10,000 square feet. In 1996, a second Baja Duty Free was opened in Eagle Pass, Texas - that store too has enjoyed tremendous success.

The secret to Baja Duty Free's success is relatively simple. The retail operation carries top quality duty free brands - major product lines include cigarettes, imported and domestic liquor, fragrances, leather goods, accessories, sunglasses, candies and crystal.

About 85 percent of Baja Duty Free's customers are Mexican, with the remainder Americans and foreign tourists. All of them buy the products and then continue on into Mexico. The average purchase is about $40.

Instrumental in the growth of Baja Duty Free in both San Ysidro and Eagle Pass has been the expertise of parent company Fairn & Swanson, which operates both stores. Fairn & Swanson, established more than 50 years ago, is recognized as the largest duty- free wholesaler and distributor on the West Coast of North America and as one of the leaders in the American duty- free industry. Fairn & Swanson supplies to cruise ships, ship chandlers, foreign military personnel, foreign consulates and United States embassies and consulates overseas.

Fairn & Swanson's annual sales are about $45 million. The company is a wholesaler, retailer, agent and distributor and provides warehousing services. In addition to Baja Duty Free, other companies include Fairn & Swanson Group (duty free wholesale, distribution, diplomatic, military); South Seas Distribution (beverages, snacks, tobacco, consumer goods); South Seas Duty Free (duty free sales, distribution, retail concessions); Spring Rock Brewing (beer and wine sales and marketing); and Cloud Trading (fishing fleets, commercial shipping).

Baja Duty Free also benefits from Fairn & Swanson's relationships with manufacturers not only as an agent but also as a master distributor of the manufacturer's products to other agents and wholesalers worldwide. These services include: extensive experience with bonded and nonbonded merchandise; consolidation of FCL and LCL shipments; worldwide shipping via land, sea or air; in-house freight forwarders and customs brokers; computerized inventory control and tracking systems; EDI capability for customers and vendors; inventory management; merchandise repacking and manipulation; and marketing and promotional support.

The Fairn & Swanson Group has also expanded its traditional customer relationship with many vendors and has become an exclusive and nonexclusive agent and distributor for many major manufacturers including Allied Lyons, Anheuser Busch, Bacardi, BAT, Bayer, Bristol Myers, Heineken, RJR-Nabisco, Seagram and Unilever. Baja Duty Free can thus offer wholesale business services for Mexican companies.

The rapidly growing potential of the United States/Mexico border has allowed Fairn & Swanson to not only develop its wholesale business, but expand the existing retail facilities. Over the next several years, a number of new Baja Duty Free facilities at other border crossings are slated to open, and they too should prove very popular with customers.