Douglas AG plans an initial public offering this year, returning to the stock market three years after U.S. buyout firm Advent International Corp. acquired the German cosmetics and perfume chain.
Shares held by funds controlled by Advent and about 70 million euros ($77 million) in new stock will be sold in the transaction, Hagen-based Douglas said in a statement. The founding Kreke family will remain “engaged” in the company, it said, without specifying how much it will hold in the future.
Advent bought Douglas in 2012 as the retailer’s earnings were dented by its Thalia bookstore unit, which was losing customers to online competitors. Since then, the company has acquired French chain Nocibe and sold the Christ jewelry division to 3i Group Plc. The Krekes retained a 20 percent stake.
“Since our de-listing, we’ve successfully transformed from a diversified retailing group operating mainly in Germany into an international chain focused on perfumes,” Chief Executive Officer Henning Kreke said in the statement. “Douglas is poised to profit from further growth in the high-end beauty market.”
An IPO would capitalize on investor interest in European retailers, which raised $8.5 billion in listings in 2014, the most in over a decade, according to data compiled by Bloomberg.
Douglas is Europe’s biggest perfume chain with more than 1,700 retail outlets in 19 countries, and controls about 17 percent of that market, it said in the statement. The company had revenue of about 2.5 billion euros in its 2013-2014 fiscal year.
“Being a specialist perfume business leaves you limited to a small part of the year -- November and December,” said Charles Allen, an analyst at Bloomberg Intelligence. “Unless they have developed their model so it includes considerably more cosmetics and skincare, I think they may struggle again as a public company.”
JPMorgan Chase & Co., Goldman Sachs Group Inc. and Deutsche Bank AG will be joint global coordinators and bookrunners for the IPO. Credit Suisse Group AG and Morgan Stanley will also be joint bookrunners. Lilja & Co. is the IPO adviser.