Feb 16, 2016
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Beauty retailer Douglas invests to counter online threat

Feb 16, 2016

German perfume and cosmetics retailer Douglas appointed a new chief executive and announced a shift of its headquarters and investment of 100 million euros ($112 million) as it seeks to respond to the spread of e-commerce.

Private equity group CVC Capital Partners bought a majority stake in the retailer last year from U.S. buyout firm Advent in a deal worth almost 3 billion euros. Advent delisted the loss-making chain from the Frankfurt stock exchange in 2013.

Isabelle Parize - LinkedIn

"Douglas is well positioned. But we see ourselves as exposed to increasing pressure from pure online retailers," Chairman Henning Kreke told Reuters on Tuesday. "Now we want to respond to this challenge."

Douglas appointed Isabelle Parize as new chief executive to take over from Kreke, who moved to the chairman role at the end of January. Parize was the boss of French perfumery chain Nocibe, which Douglas bought in 2014.

It is the first time the company chief executive will not be a member of the founding Kreke family, which still holds a 15 percent stake in the company that runs 1,700 stores

As part of a bid to better integrate store and online operations and reduce duplication, Douglas will move its headquarters from the western German town of Hagen to Duesseldorf, where it will also shift its e-commerce team, which is currently based in Cologne.

That will mean the loss of around 130 jobs in Germany and it also plans to cut around 150 positions in other countries. Douglas currently employs more than 18,000 people in 19 European countries.

It also plans to invest around 100 million euros in the next three years in areas including brand marketing, private label products, improving the shopping experience in stores and linking up better with online.

"We are convinced that this is the right strategy to secure and expand the international leadership of Douglas for the future," said Kreke.

Kreke added further funds might be available for acquisitions to help Douglas achieve its goal of being the number one or two player in all its markets, while it is also considering expanding to other countries.

Douglas saw sales in its fiscal year to September rise 5 percent to 2.6 billion euros, with e-commerce accounting for 10 percent of turnover.

$1 = 0.8948 euros

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