Dusseldorf The management of the Douglas perfumery chain surprisingly changes. Dutchman Sander van der Laan will become the new CEO on November 1st. The previous boss, Tina Müller, is joining the supervisory board after five years at the helm of the company.
Supervisory Board Chairman Henning Kreke praised “the outstanding contribution to the success story” that Müller had made. He regrets her departure. The 54-year-old emphasized that she herself had decided that now was the right time to take this step.
However, there are signs that the change has not gone quite as smoothly as it first appears. In corporate circles it is said that Müller expected to be able to continue investing in digitization and the e-commerce business. However, private equity firm CVC, which owns 85 percent of Douglas’ shares, is said to have urged more attention to costs.
“CVC is getting nervous,” it says in corporate circles. High interest payments weigh heavily on Douglas because CVC’s 2015 takeover was debt-financed. The financial investor has issued bonds with a volume of more than two billion euros. According to insiders, the interest payments amount to a very high double-digit million amount per year.
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In addition, the originally planned IPO is likely to be postponed further given the difficult stock market environment and uncertain business prospects. As has been heard in corporate circles, no Douglas IPO is planned for the next two years. And in 2025 the refinancing of the debt is due.
According to Alexander Dibelius, CEO of CVC in Germany, Müller’s departure from the operative business cannot have been due to a lack of success. Müller has “given Douglas a modern, digital direction, tripled e-commerce sales and achieved record sales and excellent results this year,” the statement said. He certifies her an “excellent commitment”.
Even in the current consumer crisis, the perfumery chain – unlike many other retailers – has not yet felt any decline in demand. “We are experiencing a catch-up effect with our customers after the Corona period,” emphasized Müller in an interview with the Handelsblatt four weeks ago.
For example, Douglas has sold more than a million lipsticks since the beginning of the year. “We’re seeing what’s called the lipstick effect, which is that during tough economic times, people continue to buy beauty products and indulge in affordable luxuries,” she said at the time. But she also emphasized: “We do not know how the propensity to consume and demand will develop.”
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Things are looking rather bleak for retail as a whole. The consumption barometer of the German Retail Association (HDE) fell in October for the third month in a row and is now at an all-time low. A survey of 1,600 consumers showed that the majority does not expect their economic situation to ease in the near future and is therefore cutting back on consumption.
At the same time, costs are increasing dramatically for all companies. This also applies to Douglas. Manufacturers are pushing for higher purchase prices, the company is feeling the effects of higher prices for parcel services in online retail, and energy costs in stores have doubled. That puts pressure on the margin.
New boss has experience with cost management
It is precisely for such scenarios that the owner CVC now apparently wants to prepare. In the coming months, the strategic direction of the company should focus more on optimizing the cost structure and the product range in such a way that sales and earnings remain high.
The professional background of the new Douglas boss van der Laan also speaks for this. He has no experience in the beauty business, having previously run the Dutch hardware discounter Action for six years. There he was able to increase sales from two to five billion euros. So Van der Laan is used to strict cost management. He previously worked for the retail company Ahold Delhaize for more than 16 years.
Working with a private equity company as the main owner shouldn’t be a problem for van der Laan either. At the discounter, he also had a private equity company as the owner in 3i – and was dismissed with much praise. “He leaves the company strong and on track to deliver on its business plan,” said 3i CEO Simon Borrows when he left Action late last year.
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The company’s expectations of the new boss are made clear by the chairman of the supervisory board, Kreke, whose family still holds a minority stake in Douglas: “He has significantly increased Action’s sales and operating result in just a few years.” That makes him an “ideal candidate”. to “Lead Douglas to the Next Phase”. It is particularly important to “further increase profitability”.
Although 500 Douglas locations have already been closed under Müller’s leadership, her successor is likely to take another critical look at the branch network. He is also expected to look at staff costs at both head office and branches.
The purchased pharmacy business also awaits him as a construction site. This clearly shows that the integration into the previous structures of Douglas and the linking of the product areas is more difficult than hoped. In addition, the planned business with prescription drugs should only bring additional profits in the very long term.
“This is a completely wrong signal,” commented an industry expert on the change at the top of Douglas. It shows again that private equity owners often have too little sense for the business and the markets. They are often very short-term oriented and underestimate the potential of future investments.
>> Read here: “Market with a three-digit billion volume” – Douglas attacks in the pharmacy business
What Tina Müller will do in the future is still open. The step was “incredibly difficult” for her, she writes on the LinkedIn platform. And she announces: “I want to set new and different impulses in the coming years.”
Her contract runs until the end of September 2023. But those around her expect that the 54-year-old could take on a new operational role sooner.
The fact that a non-competition clause in her contract prevents her from quickly switching to another dealer should not be a problem. With a personal passion for the products she currently sells at Douglas, it would come as no surprise to see her soon move to a position with a beauty products manufacturer.
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