BERLIN — Douglas Holding AG might go private and sell off some of its retail holdings, which count nearly 2,000 stores.
The move is counter to what many others in the fashion and beauty industries are doing — taking their companies public, as with the recent initial public offerings of Michael Kors Holdings, Prada and Ferragamo — but allows the retailer to focus on its core strength, beauty.
“Douglas Holding AG confirms that talks are being held between the company, members of the management board and the supervisory board of the [firm] holding a significant stake in [Douglas] and several financial investors with respect to the potential acquisition of a substantial participation in the company, for example, by way of a voluntary takeover offer,” the Hagen, Germany-based company stated on its Web site Thursday.
No further comment was available.
The company owns perfumery, confectionery, fashion, jewelry and book retailers.
According to news reports in Germany, the Kreke family, which owns 12.6 percent of Douglas Group, has initiated talks with Apax Partners and other leveraged-buyout firms to take the company private and sell off some of its less profitable businesses.
The firm’s total market value is estimated at 1.2 billion euros, or $1.53 billion at current exchange.
Henning Kreke, Douglas Group president and chief executive officer, told Financial Times Deutschland that his family’s preference is to concentrate on the highly successful Douglas Perfumery business and to sell off the company’s other retail holdings, such as Thalia bookstores and Christ jewelers. Additionally, Kreke told the Boersen-Zeitung newspaper that he believes Douglas Group’s shares are undervalued and feels the company would be more successful if managed privately, without the pressure of quarterly reports.
Food and shipping company Oetker is Douglas Holding’s largest shareholder, with a 25.8 percent stake. Drugstore chain owner Müller upped its stake in Douglas to 10 percent last year while stating an intention to buy more shares.
On Wednesday, Douglas Group reported its sales in the first quarter ended Dec. 31, 2011, rose 1.4 percent to 1.2 billion euros, or $1.62 billion. Net profits for the fiscal year ended Sept. 30, 2011, climbed 14.3 percent to 87 million euros, or $121.4 million, on net revenues that increased 1.7 percent to 3.38 billion euros, or $4.72 billion. That percentage gain was below the previously forecast 2 percent to 4 percent.
Dollar figures are calculated at average exchange for the period to which they refer.
During Wednesday’s press conference, Kreke predicted a slight increase in company revenues for the current fiscal year to 3.4 billion euros, or $4.33 billion at current exchange. He said business at Thalia — and the book retailing industry in general — could be challenging as buying habits continue to change and shift online.
Douglas shares dropped 10 percent Wednesday to 25.33 euros, or $32.25. However, the company’s stock spiked 26 percent Thursday to 32 euros, or $40.75.
For its most recent fiscal year, which ended Sept. 30, Douglas registered flat sales of 1.88 billion euros, or $2.62 billion, with its 446 perfumeries at home outperforming those 722 elsewhere.
In December, Douglas Perfumeries rolled out a signature line of color cosmetics, Absolute Douglas. The first collection: Absolute Nails, a 12-piece line of trend-influenced polishes carried at all Douglas locations. Regular-themed trend editions are also planned. The Absolute Douglas line will be expanded to include makeup in winter 2012. February’s Absolute Pastel collection has two eye shadows, a lip gloss, an eye pencil, and a mascara. April’s look is called Absolute Spicy, and adds a new nail color to the lineup. A permanent lip gloss line is planned for May. Absolute Blond/Brunette is slated for August. Like the nail range, each shade will bear a woman’s name. Existing Douglas-brand skin, hair and body care lines will continue their presence in stores unchanged.
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