German book retailer to restructure to face digital challenge

German book retailer to restructure to face digital challenge

The earnings of German book retailer Thalia's parent group Douglas Holding will be hit by the need to transfer its book business online and embrace the potential of e-books, the company said.

Profit-before-tax for Douglas, which also runs perfume, make-up and confectionary chains, fell to €200m from €292.9m last year.

Only Thalia and Douglas's confectionary business showed declines in EBITDA [earnings before interest, taxes, depreciation, and amortization], with the book unit dropping 33% to €40m, while group profit across the rest of the retailer's arms grew over 12 months.

Chief executive officer Hanning Kreke said: "We must find the optimum way of integrating our traditional stores with our online shops so that we can leverage the potential of the new megatrend, the e-book."

Kreke said Thalia needed to respond to the "extremely rapid development" of Amazon.com in its bookshops as well as online.

Meanwhile, German analysts have called for the company to tell investors what Thalia's restructuring costs will be.