Retail, Consumer & Leisure

Douglas Holding

www.douglas.de
Country Germany
Sector Retail, Consumer & Leisure
Deal type Public-to-private
Investment date December 2012
Status Realized Investment

Europe's leading beauty retailer, Douglas has more than 1,700 stores in 19 European countries. These stores welcome millions of customers each year who choose from among a continuously updated selection of over 35,000 perfumes, cosmetics and other beauty products.

A BEAUTIFUL OPPORTUNITY

Prior to Advent's investment, Douglas Holding was listed on the German stock exchange. Advent had been following the company for a number of years and when the founding family decided the time might be right for Douglas to continue its life as a private company, Advent was excellently placed to execute the deal.

In late 2012, Advent launched its take private offer in partnership with the Kreke family. "Many private equity firms were interested in becoming our partner, but it was apparent that Advent was the most strategically aligned. Advent demonstrated it could grasp the complexity of the Douglas structure." commented Dr Henning Kreke, CEO of Douglas and a representative of the founding Kreke family, on the rationale for partnering with Advent.

At the time, Douglas Holding was one of Germany's largest retail conglomerates with divisions focused on beauty (Douglas), jewelry (Christ), books (Thalia), confectionary (Hussel), and womenswear (AppelrathCüpper).

We saw that there were practically no synergies among these divisions and recognized an opportunity to invigorate the company by spinning off the non-core businesses and refocusing attention on Douglas as a powerhouse in the beauty and perfume retail sector.

BOLDER, STRONGER, FOCUSED

In June 2014, Douglas significantly expanded its international footprint by acquiring Nocibé, a leading French beauty retailer. The acquisition created the largest perfumery store network in France and accelerated Douglas' transformation from a predominantly German company to a firm with the capability to complete and win across the broader European beauty market. In addition, it set up Douglas to be the premier platform to further consolidate the fragmented European perfumery retail market.

Douglas established strong partnerships with domestic and international manufacturers, differentiating itself with a diverse array of fragrances, skincare products, color cosmetics and accessories involving both private label items and renowned premium brands.

Meanwhile, we helped Douglas achieve major cost savings by centralizing purchasing and optimizing its indirect spend. At the same time, we implemented best-in-class retail operations methods that enabled Douglas to identify trends and meet changing consumer demand more quickly.

We also worked with Douglas to engineer a complete overhaul of its online and mobile platforms. By boosting its multi-channel sales capabilities and ensuring full integration among digital and retail channels, Douglas achieved approximately 30% CAGR in online sales during Advent's ownership.

A WINNING MAKEOVER YIELDS IMPRESSIVE RESULTS

Thanks to its strategic acquisition, operational improvements and digital innovations, Douglas achieved c. 70% EBITDA¹ growth during Advent's ownership.

In August 2015, we sold our ownership stake in Douglas to a holding company jointly owned by CVC Capital Partners (CVC) and the Kreke family.

During Advent's ownership, Douglas saw especially strong results on its e-commerce platforms. Its online offerings grew to span 15 countries and captured over 50% of the market share for selective beauty products in Germany. In the 2014-15 financial year, online sales accounted for 10% of the company's total consolidated sales.

"Under Advent's ownership Douglas underwent an impressive transformation and consequently addressed the rapid changes in the retail sector," said Ranjen Sen, Advent Managing Partner. "We are incredibly proud to have assisted Douglas build an industry leading retail platform and a strong multi-channel presence."

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