"We will bring in better value, we will build a world class store," Flemingo chief executive P K Thimmaya said.
"We will bring latest brands which is not always been seen in Colombo."
He said products will be in Colombo within a month of a global release.
Sri Lanka's existing duty free retail in alcohol, tobacco, confectionary and perfume is operated by Spain based Aldeasa, a unit of the Italian based Autogrill group. It also has 6,000 square feet of retail space.
Sri Lanka's passenger traffic has been climbing up with tourist arrivals up 40 percent in 2010 and so far in 2011 while more locals are also travelling. Thimmaya said the potential annual spend is estimated at 50 to 55 million dollars in Colombo.Better pricing and availability of more brands can make passengers spend more in Colombo and prevent them from bringing goods from other duty free shops.
Flemingo, started in 1997 now ran 140 outlets including 36 in India, making it the top operator in that country. It had duty free operations in France, Russia, Poland, Romania and Turkey and in Africa and the Middle East.
Thimmaya said the group now operated in airports, seaports, land borders and ran defense and diplomatic duty free shops.
Flemingo also operates a ferry between India and Sri Lanka using a 1,000 passenger ship with its own duty free facilities.