Exclusive: CVC explores IPO, sale of German perfume retailer Douglas - sources

FRANKFURT/DUESSELDORF (Reuters) - Private equity group CVC Capital Partners is exploring options to sell or list German perfume and cosmetics retailer Douglas, three people close to the matter said.

The buyout firm is working with Goldman Sachs GS.N on a potential initial public offering or a sale, they said on Thursday. No decision is imminent and any listing would unlikely happen before the second half of the year, they added.

CVC and Goldman Sachs declined to comment, while a Douglas spokeswoman said any decision was up to the owner.

CVC in 2015 bought a majority stake in the retailer from U.S. buyout firm Advent in a deal worth almost 3 billion euros ($3.26 billion) at the time. Advent had delisted the loss-making chain from the Frankfurt stock exchange in 2013.

In its fiscal year 2018/2019, Douglas generated a profit of 17 million euros on revenues of 3.5 billion euros after a loss of 290 million euros in the year before.

Adjusted earnings before interest, tax, depreciation and amortization stood at 351 million euros that year.

Peers such as Walgreens Boots Alliance WBA.O trade at around eight times their core earnings. Peer Sephora's parent LVMH LVMH.PA trades at a higher multiple which Douglas is unlikely to fetch in any deal, people close to the matter said.

Douglas, which operates 2,400 brick-and-mortar stores in 26 European countries, focusing more and more on online sales as customers increasingly buy perfumes and cosmetics online.

Douglas Chief Executive Tina Mueller, a former executive at Opel and Henkel HNKG_p.DE who joined Douglas in 2017, told Reuters in December that the firm has ambitious growth targets.

“We have brought this company to an excellent level of growth and want to become even more profitable,” she had said, adding that the performance would lay the foundation for a potential return of the company to the stock market.

Douglas, founded as a soap manufacturer in Hamburg in 1821, is headquartered in Duesseldorf. After delisting in 2013, Douglas shifted its focus to perfumes.

Douglas also expanded with the acquisition of French perfumery chain Nocibe, Bodybell and Perfumerias IF in Spain as well as Limoni and La Gardenia in Italy.

Douglas’ family owners Kreke still hold a minority share of 15%.

Additional reporting by Alexander Hübner; Writing by Thomas Seythal; Editing by Edmund Blair