E-tail growth boosts Otto Group in H1, but fashion struggles
Retail giant Otto Group saw a boom in its first half as its already-strong online ops grew. The owner of the Freemans, Grattan, Bon Prix, Crate and Barrel, and Quelle retail brands, among others, benefited from “a fundamental change in consumer behaviour”.
The company, which is Germany’s second largest e-tailer, as well as a major player in retail, e-tail and parcels delivery internationally, gave no detailed figures. But it said the six months to the end of August, which included the height of the pandemic, started with a shortfall in revenues in March caused by the coronavirus lockdown. But business “clearly bounced back as the year progressed,” allowing it to “look back on a successful first six months”.
In its domestic market, Germany, comparable revenues rose almost 14%. It said the main driver of this jump in revenues was e-commerce, and it reported like-for-like e-tail growth of around 20% both in Germany and in its global ops.
Not that fashion helped it much. The company saw a strong rise in online demand for furniture and consumer electronics, but demand in the Fashion Retail segment slid, “burdening those group companies focused on this sector”.
“The pandemic is catalysing fundamental developments,” said group executive board chairman and CEO Alexander Birken. “For many years now, online retail has been growing much faster than over-the-counter retail. The pandemic has massively accelerated this shift, with many customers now purchasing much more frequently online.”
The company didn’t share information about the UK Grattan or Freemans brands (the latter of which is currently advertising on TV following a rebrand). But it said that at Bonprix and Witt, in March and April, “both company groups suffered from fashion consumer reticence”.
In markets such as the US and Russia, the crisis had a severe impact on their revenues. Both companies reported a single-digit percentage fall in revenues for the six-month period, even though they managed to return to growth from May onwards. The group expects the positive trend to continue until the end of the financial year.
Meanwhile, at the German Otto operation, sales rose 25% and it acquired over a million new customers. But again, fashion wasn’t a factor in this success.
But there was one notable fashion success story. The group also said that About You, the German fashion and technology e-tail start-up “continued to enjoy unfettered growth in the first six months of the financial year”. It increased its sales by around 65% and is now heading towards the €1 billion revenue milestone for the full year.
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