German perfume and cosmetics retail chain Douglas made its return to the public markets on Thursday with its shares again traded on the Frankfurt Stock Exchange.
Top Douglas executives Sander van der Laan and Mark Langer rang the traditional opening bell at the Frankfurt exchange on Thursday morning to cheers from Douglas employees.
Shares in Douglas, listed under BEAU7Y, an allusion to "beauty," began trading on Thursday morning slightly below the issue price of €26 ($28) and fell further to €22,70 by 1530 GMT.
Attention from investors to the Douglas IPO on Thursday partly reflects a dearth of IPOs by German companies in recent years, driven by difficult market conditions amid high inflation, high interest rates, geopolitical conflicts and the coronavirus pandemic.
Armaments and auto parts supplier Renk is the only other German company to debut on the stock exchange so far this year.
Douglas, a long-time fixture on the shopping streets of cities across Germany, traces its roots to a soap factory founded in 1821 by the Scottish immigrant John Sharp Douglas in Hamburg.
The first Douglas perfumery opened in 1890 on Hamburg's fashionable Jungfernstieg street.
It is now Germany's largest perfumery chain, with around 18,000 employees, and operates 1,850 stores in 22 countries across Europe.
The company was previously listed on the stock exchange from 1966 to 2013, when the investment firm Advent and the founding Kreke family took Douglas private in order to restructure the company.
The Keke family remain significant shareholders in Douglas, alongside the investment firm CVC, but have reduced their stake in the company. CVC became majority owner in 2015.
In total, just under 32% of the company will be floated on the stock exchange, with the initial public offering (IPO) expected to raise around €850 million.
Douglas plans to use the proceed to pay down debt burdens, which amounted to about €3 billion at the end of 2023, said van der Laan, the chief executive officer of the company. He said the company plans to refinance the remaining debt at more favourable conditions.
While many retailers in Germany have complained of sluggish sales, Douglas has reported strong recent growth and a return to profitability in 2023. Sales for the year were up 12%.
Douglas recently announced plans to expand further, with a target of €5 billion in annual sales by 2026. The company plans to open 200 new stores by that date, about half of them in Central Europe.
There are also plans to modernize 400 existing stores. During the pandemic, Douglas closed hundreds of stores.
According to market researchers from YouGov, consumer spending at Douglas exceeded the pre-coronavirus level again in 2023.