Douglas announces FY2017/18 results

Düsseldorf,  11 December  2018. Douglas, Europe’s leading  premium  beauty retailer, has expanded  its market position  in Europe across all channels. Acquisitions  caused Group sales to increase by 17 percent to 3.3 billion euros in fiscal year 2017/18 (ending 30 September). In organic terms, sales were stable. Despite significant expenditure on growth,  adjusted  EBITDA climbed   as well,  increasing  6  percent  year  on  year  to 376 million  euros.  In Germany  –  Douglas’  home  market  –  in-store  business initially declined  slightly, though  the market share remained  stable. After a longer  period  of weak sales in Germany, Douglas reversed its business trend in the fourth quarter with a return to positive growth.  In all regions outside Germany, Douglas continued  to grow its sales and earnings in the last fiscal year.

As Tina Müller, CEO of Douglas, commented: “Last year was one of reorganization.  We left no stone – or bit – unturned and made significant investments in our business across all five pillars of our #FORWARDBEAUTY strategy. The initial results are promising  and the   reorganization   initiative   is  gaining   traction.   In  short,  we  have  created   the foundations for sustainable, profitable growth.”

In the fiscal year just passed, Douglas  achieved  initial  tangible  results across all five pillars of its #FORWARDBEAUTY strategy. The modernisation and upgrade of the brand took  a big  step  forward  with  the  launch  of  a new  logo  and  visuals as well  as the #doitforyou and “real-love-starts-with-yourself” campaigns.

Douglas’ performance  in the e-commerce  segment  was particularly  gratifying.  Digital sales increased by 11 percent  to 423 million  euros, making Douglas Europe’s largest online retailer in its field, generating  four times as much digital  sales as its next largest competitor in Germany for example. This double-digit increase was due mainly to the growth of the company’s online shop and to the launch of a cutting-edge app that sets a new  benchmark  in  technology   and  user  experience.  Douglas  has been  making greater use of artificial intelligence  (AI) in the e-commerce segment. For example, data- driven programs such as price optimisation software from Revionics make it possible to adjust prices in real time.

In parallel, Douglas has further expanded  its in-house team of digital  experts and can now boast one of Europe’s biggest  such teams in the beauty retail field. What is more, the  company  has enhanced  its digital  expertise  through  the acquisition  of parfumdreams, an online retailer. 

Redesigned stores attract more customers and boost sales 

Last fiscal year, Douglas  also spent  substantial  amounts  of  capital  to  modernise  its bricks-and-mortar  stores and  rolled out its new visual language  in all stores across Europe. The company’s new logo will arrive in all of its stores before the end of 2019. With  a  fresh  design,  innovative  formats,  exclusive  events  and  a  clear  focus  on consultation and services, Douglas will transform its stores into places where customers enjoy a new shopping  experience with additional  services and consultation. Fifty stores across Europe have already been completely  refurbished  and upgraded. This is having a tangible  positive impact, with Douglas recording  both higher customer numbers and increased sales. Douglas has also launched innovative premium offerings, re-opening its flagship store in Frankfurt’s main shopping  street Zeil as well as a Douglas PRO store in Hamburg.  Since opening its doors  to the public  in September,  the PRO store in Hamburg  has counted  more  than  20,000  visitors, and  the average basket  there  is 10 percent higher than in other stores. 

Douglas has also made significant changes to its assortment in an effort to distinguish itself more clearly from its competitors. This year, the company added  more than 150 new  brands  to  its  portfolio. Making  sound  choices  when  scouting  for  trends is a decisive factor in setting the company apart from competition. For example, four of the top 30 skincare products were introduced only in the last twelve months. In addition  to selling trending,  high-growth brands, Douglas is also banking on high-margin  brands, whether owned brands or exclusive brands. In the medium term, the share of total sales accounted  for  by exclusive  and  owned  brands  is to  rise  from  its  current  level  of 17 percent to around 30 percent.

Thanks to more intensive marketing, we succeeded in raising the number of members in our customer  loyalty programme, the Douglas Beauty Card, to 39 million  Europe- wide  (versus 27  million  a year earlier).  Purchases by  Beauty Card  holders  already account for over two-thirds  of Douglas’ total sales. The data collected  via the Beauty Card enables  targeted  micromarketing, including  personalised  product recommendations and invitations to exclusive events. Here, too, Douglas is making increasing use of AI-based processes to address the individual needs of its customers in a targeted manner. The results speak for themselves: in addition  to a higher conversion rate, the average basket of an actively addressed  card holder  was already about 20 percent  higher  at the end of the fiscal year compared  with the group  of card holders not actively addressed.

In implementing its #FORWARDBEAUTY strategy, Douglas has thus far focused on Germany, its all-important home market, and also renewed its local market personnel. New managers were appointed in key areas such as e-commerce,  pricing  and sales, bringing  with   them   fresh  ideas  and   great   experience.   This  reorientation  –   in combination with more pricing  discipline (discounts were cut substantially) – reversed the trend in the German market, with Douglas posting slight growth in the final quarter of the fiscal year (up 0.6 percent like-for like).

“Anyone in Europe thinking  beauty, should think of Douglas first. That’s our goal, and we are getting  a step closer to it every day,” said Tina Müller. “After all our hard work in the last year, fiscal 2018/19 promises to offer us a new start. Many of the measures we have put in place are beginning to bear fruit. As the leading  omnichannel  retailer, we already occupy a strong position  in the European market, and we intend  to build  on that.”

Douglas is one of the leading retailers in the European beauty industry with about 2,400 stores and fast-growing online shops in 21 European countries. In the financial year 2017/18, the company  generated  sales of  3.3 billion  euros. Every day, around 20,000  dedicated  beauty advisors strive to make their customers more beautiful and thus happier. Douglas has a portfolio of some 38,000  high-quality  products  in  the  areas of  perfumery,  decorative  cosmetics  and skincare. Providing excellent consultation and a range of unique services, Douglas is one of the leading companies in the beauty market – both online and in stores.

#doitforyou

Dr. Julia Sosnizka
Head of Corporate Communications
Phone: +49 (0) 211 16847–585
E-mail: j.sosnizka@douglas.de