Perfumery chain Douglas closes every fifth store in Europe

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Douglas branch on Frankfurter Zeil: massive drop in sales in branch business

Photo: Ralph Peters / imago images / Ralph Peters

Europe's largest perfumery chain Douglas is responding to the corona pandemic with a massive austerity program.

Managing director Tina Müller plans to close 500 of the 2,400 branches in Europe by autumn next year and lay off more than a thousand employees.

In Germany alone, 600 employees have to go, around 60 of the 430 Douglas shops in this country are affected by the sweep.

On the other hand, Müller wants to expand the online business further.

In 2020, the Düsseldorf-based group generated sales of more than one billion euros and a double-digit operating profit margin for the first time.

The austerity program was "a logical consequence of the trend towards online trading," said Müller to SPIEGEL.

"We are now adapting the branch network exactly as it is right from today's perspective." The movement into online trading will continue.

"And I still can't say today where exactly the online journey is going," says Müller.

Negotiations with the works council

According to information from SPIEGEL, Müller expects one-off costs of around 70 million euros for the shrinking cure.

The operating profit is expected to increase annually by around 100 million euros due to the branch closings alone.

"We know how difficult it is to find a new job in retail at the moment," says Müller.

"We want to help the employees we have to part with here with their professional reorientation."

The management is currently negotiating with the works councils about severance payments.

No distinction should be made between branches with or without a works council.

The severance offer of the group is higher than usual in the industry.

Douglas has been struggling with excess capacities in stationary retail for a long time.

In southern Europe in particular, the branch network has grown significantly due to previous acquisitions, but customer footfall in city centers is declining - also intensified by the corona pandemic.

In the past fiscal year, which ended in September, the group generated a total of 6.4 percent less sales with 3.2 billion euros.

From Müller's point of view, this is already a success in view of a massive drop in sales in the branch business, which was at least somewhat offset by the increase in e-commerce.

However, that couldn't make up for the high costs.

The operating result fell by more than 16.7 percent to 292 million euros.

Douglas intends to expand its online trade even further and increasingly integrate the remaining branches.

For the past financial year, the Düsseldorf-based company reported 40.6 percent growth in digital business to EUR 822 million in sales.

The chain now generates a quarter of its business online, and almost 40 percent in its home market.

In the long term, Müller wants to convert the perfumery chain into an online retailer with an attached branch network.

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