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Beauty Beat: Douglas Embarks on Expansion Plan

Douglas Perfumeries is on an expansion course this year.

BERLIN — Douglas Perfumeries is on an expansion course this year.

The retailer said at its annual financial press conference in Düsseldorf earlier this month it would invest 80 million euros, or $98.2 million dollars at current exchange, in the 872-store chain for 2006.

The company has planned 50 openings in Europe, both in the established Western and rapidly growing Eastern European markets. Douglas noted particularly strong growth for the company in Poland, Russia, Hungary, the Czech Republic and Slovakia. With the opening of the first Douglas perfumery in Istanbul this spring, Douglas will be present in 18 countries.

Douglas has exercised a purchase option to acquire the remaining 50 percent stake in its former joint venture in Spain and Portugal from the Cortefiel Group. In France, the 35 Elytis perfumeries Douglas acquired last year as a result of its buy of French perfumery group S.A. Lavigne will be renamed Douglas and be fully integrated in the Douglas perfumery network.

Douglas also plans to step up activities in Germany, which contributed 58.7 percent, or 804.2 million euros ($983.6 million at average exchange), of total perfumery sales of 1.37 billion euros, or $1.68 billion, in the fiscal year ended Sept. 30.

There are now 416 Douglas doors in Germany, and plans call for a total of 500 doors there in the next three to five years. While Douglas previously favored large-format stores in major urban centers, the new strategy also will include openings in small and midsize towns.

Meanwhile, Douglas will broaden its presence in hair care with an international rollout of Douglas Hair, the chain’s private label hair care range, as early as next month. With the opening last year of its first Douglas Hairdesign salon in the Douglas superstore in Nuremberg — which was followed by salon openings in Cologne, Munich, Wuppertal and Vienna — the Douglas Perfumerie Group significantly deepened its activities in the hair care sector.

Douglas’ signature range features 12 hair care items and styling aids, which are priced from 9.95 euros to 14.95 euros, or $12.20 to $18.35 at current exchange. Douglas Hair features three subcollections, Absolute Volume, Ultimate Shine and Style and Shine. In addition to shampoo, conditioner and substance and shine sprays, there are Keratin Liquid Stylers, a Jelly pomade and Express Mask.

This story first appeared in the January 24, 2006 issue of WWD.  Subscribe Today.

Now on the shelves of Douglas Group’s 400-plus German doors, Douglas Hair will be rolled out internationally in February or March, a company spokesman said. “Hair care is a very dynamic sector and we are watching to see how [Douglas Hair] succeeds in Germany,” the spokesman said.

Douglas released final figures for the fiscal year ended Sept. 30. The group’s earnings before interest, taxes, depreciation and amortization grew by 3 percent to 219.5 million euros, or $268.5 million at average exchange. EBITDA for the perfumery division reached 158 million euros, or $193.2 million, up from 157 million euros in the prior year. Group sales hit 2.42 billion euros, or $2.96 billion, for the year, with perfumery sales reaching 1.37 billion euros, or $1.68 billion.

In the first quarter ended Dec. 31, Douglas Perfumeries increased sales 12 percent, on group sales that rose 9.5 percent to 905 million euros, or $1.08 billion. On the basis of first-quarter performance, the Douglas Group is projecting sales growth of 6 to 8 percent for the year, with operative earnings of 125 million to 127 million euros, or $153.5 million to $156 million at current exchange.