Specialist
Former senior executive at Douglas GmbH
Agenda
- Douglas’s bricks-and-mortar sales recovery expectations across categories and key drivers, highlighting footfall and pricing dynamics
- Online sales outlook as customers return to in-store shopping, noting threat of increased competition
- Gross and EBITDA margin expectations and inflation impact – product, rent and labour costs
Questions
1.
Could you discuss recent market footfall and sales data in the bricks-and-mortar channel, breaking this down by category from a sales perspective?
2.
What are your expectations for Douglas’s like-for-like sales YoY in May, June and July 2022, given the decline and uncertain traffic dynamic in the bricks-and-mortar channel?
3.
Why do you think the mid-market is being squeezed?
4.
What’s your like-for-like sales growth outlook in the bricks-and-mortar channel for Douglas from September to December 2022 vs 2021?
5.
You seem to be quite positive on the potential Christmas trading environment for Douglas. Would you agree?
6.
How buoyant do you expect demand to be during the Christmas trading period for Douglas?
7.
How are you expecting the broader fragrance and cosmetics market to perform during a recession, and what could this look like across categories?
8.
Are we seeing any down-trading from customers from higher- to lower-priced objects?
9.
Do you think Douglas’s pricing architecture is sufficiently wide to continue to pick up demand as customers trade down from the mid-priced products into private label rather than trading out of Douglas into another brand?
10.
How resilient was Douglas during the last recession?
11.
What is your outlook for Douglas’s e-commerce sales in full-year 2022 vs 2021? There’s been a slight drop off in e-commerce sales due to the very strong comparables vs 2021.
12.
You seem to suggest there’s potentially low-single-digit declining growth in e-commerce, and it’s similarly tough in the bricks-and-mortar market, which indicates a very tough demand environment more broadly. What is causing this challenging dynamic? Could you discuss the German sentiment around beauty?
13.
Douglas hopes to reach 50% penetration in online sales. How realistic is this, and how long do you think it could take?
14.
How competitive is Douglas’s positioning, pricing and assortment in the online channel?
15.
Douglas says it’s seeing mid-to-high-single digit market share growth in Germany. What is driving this across channels, and how sustainable is it?
16.
We’re hearing about the partner programme from Douglas, so the marketplace business. How successful do you expect this to be, and what uptake do you expect in the partner programme online?
17.
What revenue contribution are you expecting in Germany from the marketplace?
18.
Does the marketplace cannibalise Douglas’s existing offering?
19.
What are the key barriers to Douglas’s marketplace platform seeing increased revenue contribution?
20.
How healthy are Douglas’s inventory levels in bricks-and-mortar and online?
21.
Where are the key supply chain bottlenecks in the market?
22.
How aggressive are discounts in the German market, and what participation are we seeing from Douglas in terms of discounting?
23.
What difference in discounting do you think we’re seeing YoY? Is it more aggressive? If so, how much more aggressive?
24.
What gross margin pressure could we see in Germany YoY, as a percentage, given you mentioned high pressure?
25.
Is Douglas successfully offsetting inflation? Would you expect additional gross margin decline based on inflation?
26.
How is successful inflation mitigation achieved?
27.
How are brands approaching supplier inflation with retailers? What inflation is Douglas likely seeing from brands?
28.
Douglas has 330 stores in Germany. How optimal do you think this is?
29.
How are you expecting Douglas’s 2022 personnel costs to differ to 2019?
30.
How material are energy costs for a business such as Douglas? What would be the rough relative share to sales?
31.
We have gross margin pressure, rents back to 2019 levels, a slight increase in people costs and a slight increase in energy costs – how can Douglas offset this pressure through efficiencies to maintain EBITDA?
32.
What are the challenges around building out a private label offering?
33.
What are your thoughts on a potential IPO for Douglas?
34.
Do you think there are other exit opportunities for Douglas’s parent company?