Annual Report 2009/10 Excellence in Retailing - Douglas Holding

in most industrial countries, the stricter measures to consolidate deficit countries and the
tightening of monetary and economic policies in emerging countries. Nonetheless, the IfW
still predicts a rise of 2.8 percent in global production for 2011.
Slight growth continues in the euro zone
The economic development in the euro zone is expected to remain highly heterogeneous
in 2011, too. On one side, some countries, such as Germany, will most likely benefit
and have good developments in 2011 from the low interest rates and demand from emerging
economies. On the other side, the economic outlook of some countries in the European
Union will continue to be restrained. On the whole, the IfW predicts growth of 1.3 percent
in the gross domestic product for the euro zone in 2011.
Higher domestic demand in Germany
The upwards trend of the German economy is likely to continue into 2011. While the
economic upswing was mostly supported by exports in 2010, growth in domestic demand
is additionally predicted for 2011. In particular, the drop in the unemployment figure and
higher salaries in 2010 with simultaneously higher price stability are anticipated to have
a positive impact on domestic spending. All in all, the IfW projects a rise of 2.0 percent in
overall economic production.
Retail segment satisfied with Christmas business
According to surveys conducted by the German Retail Association (HDE), retailers were
satisfied with their Christmas sales. Compared to the previous year’s period, HDE had anticipated
a nominal sales increase of 2.5 percent for November-December 2010. Overall
sales are projected to have risen by a nominal 1.5 percent during the 2010 year as a whole.
Impact of proposed tax and legislative enactments in Germany
The proposed trade tax reform prescribed in the 2009 Growth Acceleration Act, which
was to provide a reduction in the trade tax add-back in real estate rents and a permanent
increase in the exemption limit for tax-deductible interests expenses will probably not be
implemented in 2011.Therefore, the proposed tax relief requested by the HDE will not take
place in the coming year.
No change in the DOUGLAS Group’s strategic direction
The DOUGLAS Group will continue to pursue its strategic direction. The aim is for all
corporate divisions to gain market share to reach or secure a leading market position in
their branch sector. The sales markets of the Group remain in Europe. From today’s standpoint,
new markets are not expected to be entered in the current and next fiscal years .
The DOUGLAS Group aims to expand and modernize its sales network. The store network
streamlining resolved in the 2008/09 fiscal year was implemented to a major extent in the
fiscal year under review. A substantial rise in consumer demand, in particular, from the
recovery of foreign markets, would have a direct positive impact on earnings.
Management Report
Key results
Business activities and operating environment
Net assets, financial position and result of operations
DOUGLAS HOLDING AG
Subsequent events
Control system and success factors
Opportunities and risks situation
Statutory disclosures
Forecast and overall assessment
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