After the completion of an analysis of its network of stores across Europe initiated in the summer of 2020, Douglas GmbH has made a strategic decision to reduce its store count. By the end of September 2022, the German beauty retailer will close around 500 of its approximately 2,400 shops across Europe.

Douglas is actively shaping its platform strategy with a long-term view to reflect changes in consumer behavior, particularly the massive shift online and the associated decline in brick-and-mortar retail. The coronavirus pandemic has further accelerated the pace of this transformation. The future viability of every store was examined on the basis of extensive individual analyses in recent months, taking into account the holiday period.

“Following our record sales in 2018/19, we benefited significantly from our investments in e-commerce as part of our #FORWARDBEAUTY strategy throughout the COVID-19 pandemic year. We have a deep understanding of our customers’ needs, understand their purchasing behavior and we will continue to drive the transformation towards e-commerce initiated in 2018,” Tina Müller, Group CEO Douglas, said. “Our success to date, with online sales of more than 1 billion euros in the entire calendar year 2020, is both a confirmation that our strategy is working and motivation for us to continue to execute on our #FORWARDBEAUTY.DigitalFirst strategy. This year, no other European beauty retailer has seen such a strong increase in online sales combined with double-digit EBITDA margins. Thanks to its loyal customers, Douglas has achieved a considerable sales volume of 3.2 billion euros, only slightly below last year’s record figure.”

The majority of the roughly 500 store closures are planned to take place in Southern Europe, and 60 in Germany, which was hit particularly hard by the impact of the COVID-19 pandemic. In some of these markets, previous acquisitions have also left Douglas with a dense, partly overlapping store network. Alongside the store closures, the company will also seek to optimize the cost base of the remainder of the store network. Discussions on the precise nature of the envisaged measures will be held with employee representatives in these markets.

The Numbers:

• Douglas generated group sales of 3.2 billion euros—just 6.4% short of last year’s record figure of 3.5 billion euros—despite a COVID-induced slump in its brick-and-mortar business after months-long lockdowns.
• Operating profit (adjusted EBITDA) declined by 16.7% year-on-year to 292 million euros. This is primarily due to the coronavirus-related decline in in-store sales and to future-oriented investments in the expansion of the e-commerce business.
• E-commerce sales at a record level of 1 billion euros in the 2020 calendar year with a double-digit EBITDA margin and a 50% increase in visits to the online shop.
• The financial year 2019/20 (30 September): record sales in e-commerce with a 40.6% increase to 822 million euros; group sales fell only moderately by 6.4% to 3.2 (previous year: 3.5) billion euros in 2019/20 despite several months of lockdown; operating profit (adjusted EBITDA) declined by 16.7% to 292 million euros.
• Douglas was able to gain market shares in all major core markets in the online beauty retail sector, according to the retail panel of the market research institute NPD Group. The sales share attributable to e-commerce over the entire year now stands at 25.4% for Europe as a whole and at 39.9% in the important German home market.

Müller said, “Our rapid transformation since 2018 is without precedent among long-established retail companies and demonstrating the strength of the combination of brick-and-mortar and online retailing. This means that our company will continue to seize its opportunities in the future and is now the only successful platform company with a history of more than a century.”