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Perfumery chain euphoria fades away: Douglas shares disappoint when the stock market returns
The Frankfurt Stock Exchange was postered in mint green for the second IPO of the Douglas perfumery chain
© Capital
The Douglas perfumery chain manages to return to the stock market. But those present in Frankfurt quickly make long faces: the share price plummets at the start
1,850 branches in 22 countries, around 18,000 employees and a place on the stock exchange again in the future: Douglas is returning there on Thursday after an eleven-year break. The Frankfurt trading floor is colored mint green this morning. Almost all of the employees invited to the comeback wear T-shirts in the Douglas color and spread a celebratory mood. Only the company management wore a suit and tie for this event. And this meets shortly before 9 a.m. at the head of the trading floor under the DAX chart.
Today is an exciting day for the perfumery chain, says Douglas CEO Sander van der Laan. Celebrate the blossoming of the company. Ultimately, the comeback is a milestone in Douglas’ “Let it Bloom” growth strategy. Henning Kreke, chairman of the supervisory board and member of the founding family, also emphasized the “historic moment” for Douglas in a short speech. There is great hope for a great IPO.
The stock market bell only rings briefly
The big moment comes at 9:15 a.m.: the first Douglas share price is announced. The price is 25.50 euros. There is applause in the Frankfurt trading floor and the Douglas bosses ring the bell that opens trading for the perfumery chain together. The employees support with smaller bells decorated with mint-colored bows. But after just a minute, the cheering and ringing died down and the hall became almost silent.
Celebration of the IPO: Douglas employees ring the stock market bell
© Capital
As champagne is distributed, the euphoria and excitement of those present slowly fade away. It quickly becomes apparent from some disillusioned faces that the initial share price is disappointing. At 25.50 euros, this is 50 cents below the issue price of 26 euros – even though Douglas had already allocated the titles to the lower end of the offer range of up to 30 euros. Deutsche Börse board member Thomas Book tries to save the mood by reaching for the microphone: He has rarely experienced so much passion and fun from a company.
Shares are falling significantly despite a positive stock market environment
Meanwhile, the leading index Dax reached a new record high of 18,171.06 points. Investors on the German stock market seem to be in a buying mood. They only hold back when it comes to Douglas. By the afternoon the price will fall further to 22.66 euros.
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The perfumery stocks were said to have been trading hotly in the previous weeks, and the investment bankers’ order books had apparently filled up quickly. Investor demand exceeds supply, the banks involved announced shortly after the subscription period began last week. It’s hardly surprising that Daniel Pindur from majority shareholder CVC exuded confidence before the bell rang: Douglas had never been in better shape.
IPO aims to reduce mountain of debt
Is it all just hot air? The perfumery chain, which had suffered during the pandemic, was recently able to recover in its operational business. Douglas increased its sales by eight percent to around 1.56 billion euros in the period from October to the end of December 2023 with the Christmas business, which is particularly important for retailers. The chain also increased its operating income and profit.
CEO van der Laan sees Douglas with its branches and online shops on a growth path. He wants to increase annual sales from 4.1 billion euros to five billion euros by 2026. The return to the stock market now marks “the beginning of a new phase in the Douglas history,” said the perfumery boss at the IPO.
Stock exchange bells decorated with mint green bows wait for the Douglas employees
© Capital
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The IPO shifts the ownership structure at Douglas: Although the financial investor CVC and the founding Kreke family remain the main shareholders, their holdings are declining. In the future, CVC’s share will be 54.4 instead of 84 percent, and the family of supervisory board chairman Kreke will reduce their share from 16 to 10.2 percent. Both majority shareholders do not sell any shares during the issue, but instead inject an additional 300 million euros, so that Douglas can reduce its mountain of debt by around 1.3 billion euros.
Douglas was delisted from the stock exchange in 2013 after the joint takeover by the financial investor Advent and the Kreke family.
With Reuters
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