Case Study: Otto Group
Second largest Online Retailer in the World
The German international retail group Otto has seen its best results in over 20 years. Last year’s revenue gain was the largest ever since the German reunification in 1990. The group’s strongest growth market is Germany – and the company is now even considering acquisitions.
Strongest Growth in 20 Years
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Hamburg, 14 April 2011 – In 2010/11 Hamburg-based Otto Group grew revenues by 12.5% to €11.4 billion ($16.4 bn). Profits were “most pleasing” as the company announced Thursday. “And we would be willing to consider offers (for acquisitions)” the group’s CEO Hans-Otto Schrader told Reuters. “Jack Wolfskin would be a great fit”. But there are no current negotiations, he stated.
All three pillars of the group grew by two digits:
Otto’s financial year ended February 28th.
The group was also able to benefit from the bankruptcy of Otto’s former mail order competitor Quelle (KarstadtQuelle Group) in late 2009. Former Quelle customers spend an additional 200 to 300 million euro (288 to 432 million dollars). In total the division grew by €1.3 billion ($1.87 bn).
While the group is active all around the world and very strong in Russia and Japan the Germany business grew above average. Sales revenues went up 13.6% to €6.6 billion ($9.5 bn). Mr. Schrader said the owed this increase to the booming German economy and strong consumer confidence. However, the group grew even faster than the market’s domestic economy.
In Russia the group was able to almost double revenues to €349 million ($502 million) – thanks to the take-over of Quelle’s Russian business.
Second only to Amazon
The Internet has become Otto’s most important distribution channel. Online revenues grew 25% to €4.8 billion ($6.9 bn), the company reports. Almost 50% of the group’s entire retail revenue is now generated across its ca. 50 online platforms. In Germany e-Commerce revenues even rose 27.2% to €3.1 billion ($4.46 bn). Otto mail order shopping sells 70% online, Baur mail order shopping 64%. Worldwide Otto is the second largest online retailer – second only to Amazon.
Source: Manager Magazin