Douglas to Shut 500 Stores in Europe as Online Sales Surge

Douglas to Shut 500 Stores in Europe as Online Sales Surge

PARIS – Douglas, Europe’s largest premium beauty retailer, reported sales fell 6.4 percent for its most recent fiscal year, buffeted by the group’s e-commerce business.

Sales at the Munich, Germany-based company reached 3.2 billion euros in its fiscal year ended Sept. 30, 2020.

The group also announced Thursday that due to a sustained shift in consumer behavior toward online shopping, approximately 500 of its 2,400 stores in Europe – mostly in Southern Europe – would be shuttered by fall 2022. Of the closures, there will be about 60 in Germany, where Douglas has close to 430 stores.

Meanwhile, stores will be further integrated into Douglas’ digital platform.

“We also have big plans for the months to come: The necessary reduction of our store network will be accompanied by investments in flagship stores in top locations, international leading brands and the consistent expansion of digital retail throughout Europe,” Müller, group chief executive of Douglas, said in a statement.

The store closures, plus other measures, are expected to result in operating profit of around 120 million euros per year, starting from the group’s next fiscal year onward.

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In the 2019-2020 fiscal year, Douglas’ operating profit declined 16.7 percent to 292 million euros, mostly due to the brick-and-mortar business’s slowdown because of COVID-19-related lockdowns and investments in expanding the group’s e-commerce activity.

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Douglas’ e-commerce sales surged 40.6 percent to 822 million euros in the fiscal year. During the 2020 calendar year, it generated more than 1 billion euros in e-commerce revenues for the first time.

In the fourth quarter of Douglas’ fiscal year, the group’s e-commerce sales accelerated, gaining 44.5 percent, with southwestern and eastern Europe recording strong online growth rates of more than 80 percent.

Last year, Douglas’ market share in the online beauty retail sector was 25.4 percent for Europe and 39.9 percent for Germany, according to NPD Group.

During its most recent fiscal year, Douglas notched up over 40 percent more online customers. In the 2020 calendar year, the number of visits to the retailer’s online shop rose more than 50 percent.

Thanks to Douglas’ beauty marketplace, where partner companies sell their products, the retailer’s assortment surpassed 100,000 products. Douglas’ marketplace is now operational in Germany, Austria and France.

“Following our record sales in 2018-2019, we benefited significantly from our investments in e-commerce as part of our #FORWARDBEAUTY strategy through the Covid-19 pandemic year,” said Müller, referring to an initiative to digitize Douglas overall. “We have a deep understanding of our customers’ needs, understand their purchasing behavior, and we will continue to drive the transformation towards e-commerce initiated in 2018.”

For more, see:

Douglas’ Tina Müller: Building a Better Platform

Douglas Returns to Growth in June

Douglas CEO to Return July 1; Company Creates New Role

Amid Crisis, Douglas Opens Its Online Market to More Retailers

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