Acquisitions help fragrance retailer Douglas post growth
today Dec 11, 2018
German fragrance retailer Douglas is struggling to cope with the fierce competition facing the beauty industry. Excluding acquisitions, sales for the last financial year ended 30 September stagnated at 2.8 billion euros ($3.1bn), compared to 3% growth in the previous year, results published on Tuesday in Dusseldorf showed.
The chain has gone on a shopping spree: in Italy, it acquired the cosmetics and fragrance retailers Limoni and La Gardenia including 500 shops, and in Spain it purchased a further 300 stores. In Germany, it added Parfumdreams to its portfolio to strengthen its online presence. Including acquisitions, revenues climbed 17% to 3.3 billion euros ($3.7bn). Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) grew 6% to 376 million euros ($426m).
The German fragrance market is undergoing changes, with new brands competing with Douglas, the leading retailer, for customers. Online fashion retailer Zalando is also selling beauty and fragrance products, and beauty retailer Sephora has plans to expand its presence in Germany - it is part of French luxury group LVMH (which also owns Dior, Louis Vuitton, and Moet & Chandon).
New boss Tina Mueller prescribed a beauty makeover: branches are to be transformed to elevate the experience. In the three months between July and September 2018, the group reported another small increase in sales in Germany. A reorganisation and reduction in promotional activity led to a “turnaround in the German business”, the company said. In Germany, Douglas operates 435 stores.
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