“Together with Douglas, the European industry leader, we have found the best shareholder of Bodybell’s future, which will enable the company to move to the next stage of development and further strengthen its leading position in the industry. We are confident that this operation will be of great importance to all parties.” Leopoldo Reanio, the then head of the investment firm HIG Capital, sold the Bodybell perfume chain to the German group Douglas.
Five years have passed since these statements. Including a pandemic and a change in business model in the perfume sector, making online sales more relevant; But, also, a company that has stopped on its way to Spain and which claims that its operations in this market are not profitable. Because of this, he says, 7 out of 10 establishments should close (his original proposal was 136, though it could be reduced to around 120) and release nearly 1,000 people.
“The future of the Spanish subsidiary inevitably means a return to viability, which requires a full adaptation of the commercial network to open up opportunities for the stores that have the greatest potential,” the company said in announcing the layoffs and closures. Disintegration of most of its network. If this does not happen, it proves once again that the viability of the entire Spanish business is in jeopardy.
The most recent history of the Douglas Perfume Network is a combination of corporate operations, the integration of competing networks and venture capital firms as shareholders.
As a starting point, the German multinational Controlled by venture capital firm CVC. He bought it in 2015 from another investment firm, American Advent, in an operation valued at 3,000 million euros at the time. It is a multinational company operating throughout Europe and where the investment firm is considering alternatives to withdrawing its stake. Five years is usually the time when venture capital firms allow themselves to stay in the equity and make their investment profitable. For example, CVC, simply Prior to the pandemic, the perfume and cosmetics network was listed on the stock exchange.. But a pandemic came and changed all plans.
In Spain, the network was built through checks, combining several major neighborhood pharmacies and perfume chains. In 2017, he acquired Bodybell and If. The first was already the result of a merger. Behind him, too, is venture capital. In 2005, Bodybell, controlled by firm N + 1, was left with its rival Juteco in a € 100 million transaction. Instead, if he was a more traditional owner, because before integrating into Douglas he was part of the Basque distribution group Erosk.
With this sum of chains (formerly Juteco, Bodybell and If), Douglas accelerated in 2017 with more than 380 chain stores in Spain and forecasts that it would reach revenue of € 300 million, which he had set. The then head of Spain, Antimarise beaches.
But these predictions did not materialize. Even before the pandemic, the Spanish subsidiary had red numbers. In 2019, he lost almost 19 million euros. The negative result, which tripled in 2020, with COVID having the biggest impact this year, was € 52.5 million. That year he also projected an 18% drop in revenue when he was left with € 200.4 million. For this reason, in his annual report, he assured that he did not have enough liquidity to repay the debts of 2022 and 2023, which Questioned its continuity as a company In operation, reports the newspaper “Expansión”.
In this context of integration and goals that are not reflected, the workforce accumulates job cuts behind the scenes. “How are we? Well irritated, I have three ERE [Expedientes de Regulación de Empleo] “And I’m one of those people who continues to work, but what they’ve offered us now, I do not see a big future for,” said Adela, a fictitious name for Douglas’s employee at one of his facilities in Madrid.
In February, a German company announced the closure of 136 stores in Spain and the release of nearly 1,000 people. For this reason, workers’ representatives, trying to negotiate to reduce the impact of the closure, went on a three-day strike. Last, this Wednesday, which coincides with the final negotiation meeting between union representatives and the company.
“They barely moved. So far, we have managed to save 12 stores through negotiations and offered another 33, but the company says no, the second one will survive, but nothing more, ”explains Rolando Kano, head of the company. CCOO Services Federation Action Zone Association.
There is also no agreement on compensation for dismissed workers. We demand 35 working days and 24 monthly payments per year, and the company offers 30 days and a maximum of 19, ”said the union representative. First of all, Cano emphasizes the impact on employment. “Two years ago there were more than 2,200 employees. There are now about 1,500 and, according to Douglas, the workforce will remain a maximum of 600 people.”
“That is why they are following the strike en masse, because it is a very tired staff,” Kano said.
The company committee, which also includes UGT and USO, calls for volunteering at exits and relocating jobs to stores that are still open. The problem, sources point out, is that all Douglas establishments in many provinces will be closed. In other countries, such as the Basques or Madrid, part of the network will continue. In this last community it would be only 12 out of 49 stores.
In the case of Douglas, staff members emphasize not only job cuts, but also the wage model and incentive system that has changed in recent years.
The problems of incentives go a long way. “In 2020, hardly anyone blamed Kovid. When 2021 came, the company changed and set 2019 to measure sales growth. “We filed a lawsuit and then agreed on at least 50% of the goals,” Rolando Kano explains. Now the Labor Council is criticizing Douglas for introducing new goals to achieve the commission payment. For example, increase sales by 23% compared to what was achieved in the first quarter of 2021.
Some of the incentives they find impossible are not only because of the economic situation, but also because the network’s commercial strategy means that sales in the online store have much more discounts than in street stores. Price difference that sometimes reaches 30% or 40%.
Staff representatives also point out that another change proposed by management is the abolition of additional taxes on weekend work, in the case of all staff; And cancel overnight bonuses for those who work in warehouses.
The template with the lowest scale does not reach 1000 euros per month. “I have colleagues who get the minimum wage,” Adela says of her shop. Douglas approved his at the end of 2021 The last collective agreement. The basic salary for employees who work as a warehouse, cashier or shop or warehouse assistant is 903.51 euros per month. Highest base salary for a store manager, € 1175.46; Including incentives.
Before Douglas leaves, other perfume chains have growth plans like Primor or Druni. According to consulting firm Kantar, perfume and hygiene sales rankings will be occupied by Mercadona, Carrefour, Primor, Druni and El Corte Inglés by the end of 2021.
Source: El Diario