THE WHAT? Douglas has announced that there will be adjustments to its European store network in view of the months-long lockdowns which have accelerated the general trend towards online shopping.
THE DETAILS Some 500 stores are to be closed, the majority in Southern Europe where previous acquisitions have left Douglas with a dense and partly overlapping store network, and 60 in Germany. The German retailer said that some 600 store employees would be affected in Germany and that it had commissioned a transfer agency to support them.
The company expects to reduce its cost base while retaining a significant portion of the sales from closed stores. The resulting EBITDA impact is expected to be circa 120 million euros per year.
THE WHY? The coronavirus pandemic has accelerated the pace of the shift to online retail and decline in bricks-and-mortar business, Douglas said in a statement. Tina Müller, Group CEO Douglas, explains, “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 behaviour and we will continue to drive the transformation towards e-commerce initiated in 2018. 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.”