(Bloomberg) -- Perfume retailer Douglas is looking to raise as much as €1.1 billion ($1.2 billion) through a listing in Frankfurt, as private equity owner CVC Capital Partners bets on a rebound in European initial public offerings.

Douglas, a well-known chain on European shopping streets, plans to raise about €800 million by selling new shares in the IPO and another €300 million via an equity injection from existing shareholders, according to a statement on Monday. CVC is seeking a valuation of more than €7 billion for Douglas, Bloomberg News reported in August. 

Dusseldorf-based Douglas has been building out a network of more than 1,800 stores in 22 countries and expanding its e-commerce offerings across Europe. The company may appeal to investors looking for a pure-play investment in higher-end beauty products. Douglas’s biggest rival, Sephora, is owned by LVMH, the French luxury giant that also owns brands ranging from Hennessy Cognac to Dior fashion.

The offering will be a big test of investor appetite for new equities, and if it succeeds, it could lure additional companies to come to market. 

New listings slowed over the past two years as the surge in interest rates dented demand for IPOs. Now, there’s a nascent rebound as central banks end their rate increases and stock markets rise to record highs. EQT AB plans to kick off the listing of skin-care business Galderma in Switzerland as soon as this month, Bloomberg News reported last week.

CVC doesn’t plan to sell shares in the offering and will continue to hold an indirect majority interest in Douglas, which will use the proceeds to reduce its debt. The company plans to refinance its remaining borrowings in connection with the IPO.

To bolster chances of a successful listing, CVC is contemplating guaranteeing to buy new shares if the company is unable to sell them to external investors, Bloomberg reported last month, providing a so-called backstop that could be financed with a loan backed by CVC’s Douglas shares.

CVC acquired Douglas — whose roots date back to 1821 — from Advent International and the founding Kreke family in 2015 for about €2.8 billion. 

Douglas is aiming for mid-term sales growth of about 7% a year, with a profit margin of about 18.5%.

Citigroup Inc., Deutsche Bank AG, Goldman Sachs Group Inc., UniCredit SpA and UBS Group AG are working on the offering.

--With assistance from Alexandra Muller.

(Updates with sales, margin targets in ninth paragraph.)

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