Douglas boss Sander van der Laan starts with a heavy mortgage

In fact, the Douglas balance sheet shows a net loss of 306.5 million euros. Goodwill amortization of almost 232 million euros weighs on the figures as well as the significantly increased interest costs. Added to this are restructuring expenses for branch closures.

For the private equity company CVC, which owns 85 percent of the shares in Douglas, this is a signal to change course. According to business circles, investors want more income and fewer costs. Müller did not want to support this course as CEO, but wanted to continue the high investments in digitization and the e-commerce business.

The 54-year-old streamlined Douglas’ branch network and optimized the online shop and sales via social media. Online sales rose quickly and saved the perfumery chain from the corona lockdowns. In addition, Müller had increasingly focused on luxury products that yield a higher margin and appeal to a more solvent clientele.

>> Read more: Record sales and “excellent result” – but Tina Müller leaves the Douglas leadership

Her successor van der Laan intends to stick to this basic strategy. “I’m not going to completely turn the business upside down.” Some projects need to be accelerated, others would have a lower priority, said van der Laan, without giving details.

Van der Laan comes to Douglas from a discount chain

One thing is certain: Van der Laan must now get costs under control more quickly than its predecessor. The focus is “strong on cost and cash management and thus the earnings situation,” said the 54-year-old. Van der Laan has over 30 years of experience in the consumer goods industry, but none in the beauty business. The Dutchman has driven the expansion of the cheap discounter Action over the past six years. The counterpart to the German cheap chains Tedi and Kik increased sales from two to five billion euros during his time.

Like his predecessor Müller, Van der Laan is struggling with the large debt burden that CVC burdened the company with the majority takeover in 2015. The financial investor has issued bonds with a volume of more than two billion euros. According to company insiders, the interest payments amount to a very high double-digit million amount per year. The rise in interest rates is exacerbating the situation. Debt refinancing is due in 2025.

Van der Laan has to succeed in reducing costs, even though the general conditions are becoming more difficult: Manufacturers of perfumes and creams are pushing for higher purchase prices, the costs for parcel services in online retail are rising, and energy costs in Douglas’ stationary stores have doubled .

On the revenue side, it is unclear how consumers’ willingness to buy will develop after the Christmas business and in view of the price increases. Van der Laan also admits: “Inflation, falling purchasing power and disruptions in the supply chain will continue to concern us in the coming months and could also have an increasing impact on our business.”

Exact strategy only in the spring

The manager announced that he would like to present the cornerstones of his strategy in spring 2023. He still has to work out a precise plan. “I’ve been in office less than nine weeks. It is still too early to present adjustments.”

It is clear that the manager at Douglas wants to strengthen the omnichannel strategy of online and offline business. According to the Dutchman, most Douglas customers want both sales channels. Customers can shop quickly on the Internet and get advice in the branches.

Douglas generated a third of its sales online in the past year – twice as much as before the pandemic. Compared to the previous year, this was a slight drop of 0.7 percent because people are increasingly shopping in the cities again. The branch business experienced a strong comeback after the end of the corona restrictions. Here sales increased by more than 27 percent.

Exactly how van der Laan wants to reduce costs, he did not want to be tricked out by the investors. Although 500 Douglas locations have already been closed under Müller’s leadership, he should take another critical look at the branch network.

Potential savings in staff

He should also take personnel costs into account. According to van der Laan, no cost reduction program is planned for staff. However, new contracts would be viewed critically. In line with this are statements by industry experts that, particularly in the e-commerce sector, staff reductions are to be achieved through natural fluctuation. Although the online team at Douglas has been greatly expanded, the digital business is likely to grow more slowly in the future than during the time of the corona restrictions.

There is obviously also potential for savings in staff at headquarters. Douglas has complex structures and it cannot be ruled out that some employees do double work. That is currently being analysed, says van der Laan. It is likely to become more difficult to reduce staff in the branches. Because customers ask for advice when they go to a branch – and that is labour-intensive.

Van der Laan also announced that he wanted to increase sales and profits, but did not provide any details. The manager can also achieve this by raising prices. According to industry experts, Douglas could win new customers with an express delivery. The new CEO should also stick to Müller’s plans. Douglas apparently plans to offer such a service in several cities from 2023.

Van der Laan said he was almost at the end of his induction period. He introduced himself to all central teams, visited 80 branches and held discussions with over 200 employees. When the next annual figures are presented, the manager alone has to be responsible for the development of the figures.

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