Douglas Group Plans IPO
● The German beauty retailer could go public as early as this month and targets an equity contribution of around 1.1 billion euros from the transaction.
PARIS — Douglas Group said Monday that it plans a public listing on the regulated market of the Frankfurt Stock Exchange as early as March 2024, subject to capital market conditions.
The Düsseldorf, Germany-based beauty retailer targets an equity contribution of around 1.1 billion euros, including the targeted IPO primary proceeds and an added equity injection of around 300 million euros from the current shareholders, it said in a statement.
Group shareholders include Kirk Beauty International SA, the holding company majority owned by funds advised by CVC Capital Partners and the Kreke family.
IPOs are heating up in the European beauty market, with Puig and reportedly Galderma mulling public offers.
“The proceeds are expected to be used to continue deleveraging the Douglas Group’s balance sheet,” the company said.
Douglas Group leveraged substantially after its business was hit by the coronavirus pandemic. At the end of the first quarter, the group’s net financial debt was 3.06 billion euros.
“The remaining debt position is expected to be refinanced at better terms in connection with the IPO,” the company continued. “The IPO would accelerate the debt reduction and decrease the interest expenses of the company, thus enlarging the financial flexibility of the Douglas Group and its further value creation.”
Following the IPO, CVC Capital Partners will maintain an indirect majority interest in Douglas Group, and the Kreke family is to remain an indirect shareholder in it. Neither will sell any shares at the IPO.
“With our strong performing omnichannel business model we cater to customers in our stores and e-comm business and have successfully set the course for long-term future growth with our strategy ‘Let it Bloom – Douglas 2026,’” said Sander van der Laan, chief executive officer of Douglas Group, in the statement. “Our IPO is the logical next step for us to leverage our full potential in the future as a publicly listed company.
“Driven by our highly motivated team, Douglas Group is ideally positioned to further capitalize on the large, resilient and growing European premium beauty market, where our customers are attracted by our comprehensive beauty offering and value our broad and distinctive range of brands,” he continued, referring to a market that is expected to increase by around 5.4 percent at a compound annual growth rate, or CAGR, to 24.2 billion euros by 2028.
“We are very proud of the development of Douglas Group in recent years — the group has successfully transformed into the number-one omnichannel premium beauty destination in Europe,” added Henning Kreke, chairman of the supervisory board of Douglas Group, speaking of the retailer’s five largest European countries: Germany, France, Italy, the Netherlands and Poland, according to OC&C analysis.
“Our family sees itself as a passionate and committed shareholder, and looks forward to continuing to accompany the Douglas Group on its journey in the future,” he said.
The company said it is on track to reach its mid-term target to grow group net sales at a CAGR of around 7 percent and achieve an adjusted earnings before interest, taxes, depreciation and amortization margin of around 18.5 percent.
In the company’s first-quarter 2024, sales gained 8 percent in reported terms to 1.56 billion euros, while on a like-forlike basis, they advanced 7.5 percent. Omnichannel growth was robust, with net store sales and e-commerce sales rising 6.7 and 10.7 percent, respectively.
In the period, Douglas Group’s net income grew 10.6 percent to 125.2 million euros.