BERLIN — Amid closed-door negotiations and rumors of privatization or divestment, Douglas Group AG’s net sales rose 1.3 percent to 1.7 billion euros, or $2.26 billion, in the first five months of its current fiscal year. 

 

During the period between Oct. 1, 2011, and Feb. 29, 2012, the Hagen, Germany-based company, whose retail activities include Douglas Perfumeries, plus books jewelry, fashion and confectionery businesses, received a 3.1 percent sales boost in its home market. On a like-for-like basis, domestic revenues increased 3.2 percent. Meanwhile, sales abroad dipped 2.3 percent, and they declined 1.5 percent on a comparable basis. 

 

Dollar figures are calculated at average exchange for the period to which they refer.

 

Revenues at the 1,168 Douglas Perfumeries rose 0.8 percent in the five-month period, fueled by 5 percent sales growth from its 446 Germany-based doors.

 

Douglas Group’s embattled Thalia books chain posted a 0.6 percent sales decline. 

 

The company confirmed its previously forecast EBITDA for the current fiscal of 200 million euros to 250 million euros, or $264.5 million to $330.6 million at current exchange, and sales of more than 3.4 billion euros, or $4.5 billion.  

 

Speaking today at the company’s annual general meeting, Henning Kreke, president and chief executive officer of Douglas Holding, Douglas Group’s parent company, addressed topics concerning a possible company privatization or the sale of its less profitable arms, such as Thalia. Speculation about those subjects have been percolating in the German press since mid-January, when Douglas Group confirmed that talks were being held between itself, members of its management and supervisory boards plus several financial investors (reportedly Apax Partners, BC Partners and Permira). Douglas had also said shareholder and drugstore chain owner Erwin Mueller plans to obtain a larger stake in Douglas.

 

Kreke clarified a new plan for Thalia that includes floor space reduction, productivity measures and possible store closures. The strategy would result in provisions of about 40 million euros, or $52.9 million at current exchange, as well as write-downs of close to 130 million euros, or $171.9 million, after balance-sheet adjustments. In addition, Thalia co-owner Juergen Koennecke will sell his 25 percent stake in the book chain to the Kreke family. 

 

Douglas quoted Kreke as saying in the meeting, “The last thing we want to do is break up the Douglas Group.” He also emphasized the company would only join forces with an investor to go private if common interests could be established. Kreke went on to voice his concerns that the Douglas stock was undervalued at the end of last year, holding risks for the group and its corporate culture. Still, he stated, “a potential delisting, if it was to happen, would be the result of a long development.”

 

Additionally, Douglas announced it will open 50 new stores this fiscal year, including 40 perfumeries, and add a division director for e-commerce to its executive board. American Nicholas Denissen, currently at Amazon, will assume the role by April 2013.

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