The IPO was internally called “Project Tulpe”, but it was not a great success, but rather the opposite. The shares of the Douglas perfumery chain literally plummeted when they returned to the Frankfurt Stock Exchange. The first price on Thursday was 25.50 euros, below the issue price of 26 euros – even though Douglas had already allocated the titles at the lower end of the range. Later it fell by up to twelve percent, to well below 23 euros.
When CEO Sander van der Laan rang the big stock exchange bell in the trading floor, there was still a celebratory mood. Employees rang small bells at the same time. The 890 million euro issue, called “Project Tulpe,” is the “beginning of a new phase in Douglas history,” said van der Laan. “We are back,” shouted supervisory board chairman and major shareholder Henning Kreke. The stock market value of the Düsseldorf company then melted from 2.8 billion to around 2.5 billion euros within a few hours. The joy was quickly gone.
Investment bankers tried to investigate the causes. “It made investors nervous that the shares were issued at the lower end. This triggered a downward spiral,” said a capital market expert involved in the issue. The warning from the “Gucci” group Kering about falling sales from the previous day had put an additional strain on the mood in the luxury segment. “Now she has to find her footing. I am sure that she will recover in the medium term.” Investors are still cautious, another banker said. “The fact that Douglas managed to go public is already a success.” A banker referred to the shoe company Birkenstock, whose issue in New York took four weeks for the shares to reach the issue price again.
Investors on the German stock market generally continued to be in a buying mood – the leading index Dax reached a new record high. The two billion franc IPO of the Swiss skin care group Galderma in Zurich is also going better: the shares are allocated at 53 francs at the upper end of the price range, the debut is planned for Friday. Both companies currently belong to financial investors, and both are using the proceeds from the IPO to reduce the debt that the previous owners have saddled them with. Douglas will receive a gross amount of 850 million euros from the IPO, and the financial investor CVC and the Kreke family will add a further 300 million euros.
“That wasn’t a great signal for other IPOs.”
Douglas was delisted from the stock exchange in 2013 after the joint takeover by the financial investor Advent and the Kreke family. In 2015, the majority went to CVC for almost three billion euros. The investor wants to get out; with the IPO he diluted his stake from 84 to 54.4 percent. 31.8 percent of the shares are in free float. Deutsche Börse board member Thomas Book expressed confidence. “Douglas is in full bloom,” he said on the floor. The IPO is the beginning of a new growth story.
The chain, which suffered during the Corona crisis, had recently gained momentum to go public. In the first quarter of 2023/24, with the important Christmas business, sales rose by eight percent to 1.56 billion euros, and profits also shot up. CEO van der Laan sees Douglas with its branches and online shops on a growth path – by 2026 he wants to increase sales to five billion euros out of 4.1 billion. Douglas operates online shops and 1,850 branches in 27 European countries.
The bankers don’t believe that the poor reception for Douglas will deter other stock market candidates. “It wasn’t a great signal for other IPOs, but it worked,” one of them said. In Germany, however, the number of candidates is limited.