Douglas - taking a position again

All,

Please find our updated analysis of Douglas here.

We are taking a 5% of NAV long position in the SUNs at 72c/E. 

The company has turned a corner and its German margins (under threat from online migration) have come under control. Also its Southern European business should suffer less "one-off” set-backs going forward. France by contrast will again have had disappointing results due to the Yellow Vest movement. Eastern Europe should have continued strongly. 

We understand also from department stores and statistics bureaus that the German Christmas trade has been solid with strong performance in particular in perfumes and cosmetics among other categories. 

Q1 is the most important quarter for Douglas and an early catalyst could come in mid February when December numbers are reported. 

Overall we see the company back on the front foot and are expecting a return to 1.3x FCF Interest Coverage this year. 

Wolfgang