German beauty retailer Douglas is poised to begin a financial restructuring next year as it reels from the effects of the Covid-19 pandemic, two sources said.
Speaking to Reuters, the whistleblowers said that, following the busy festive period, Douglas would enter talks with creditors to adjust its finances.
Douglas could opt to refinance or strike a deal to amend and extend its maturities, or choose to swap its debt for equity.
“Our outstanding bonds mature in 2022 and 2023 respectively. We will therefore begin refinancing on a regular basis in the coming year,” a corporate spokesperson told Cosmetics Busienss.
As of June 2020, Douglas’ net debt stood at €2.1bn, while its outstanding loans and bonds are expected to mature from early 2022.
The retailer’s owner, CVC Capital Partners, will inject additional equity if it is needed, the sources added.
The private equity firm holds a majority stake in the retailer, which it bought from US company Advent in 2015, in a deal that fetched €3bn.
However, the retailer portrayed a different story of its finances earlier in the year.
Following reports of an uptick in e-commerce sales by 40% in the first nine months of 2020 and a sales drop of just 7.5%, the group’s CEO, Tina Müller, said the retailer had “safely navigated Douglas through the corona crisis”.
“Our fast and resolute crisis management, our strict cost discipline, and the early digitalisation of the company in line with our #ForwardBeauty strategy had a clear impact,” she added.
Cosmetics Business reached out to Douglas for further comment.