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Otto Group

Coordinates: 53°36′3.17″N 10°4′21.12″E / 53.6008806°N 10.0725333°E / 53.6008806; 10.0725333
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Otto GmbH & Co KG
Formerly
  • Werner Otto Versandhandel
  • Otto Versand
Company typePrivate
Industryretail, e-commerce
GenreMail order
Founded17 August 1949
FounderWerner Otto
Headquarters
Hamburg
,
Germany
Area served
Europe, United States of America, Canada, Asia
Key people
  • Michael Otto (Chairman of the Supervisory Board)
  • Alexander Birken (CEO and Chairman of the Executive Board)[1]
Revenue€16.2 billion[1] (2023)
OwnerMichael Otto Foundation
Number of employees
41,186[1] (2023)
SubsidiariesCrate & Barrel, Bonprix, About You
Websitewww.ottogroup.com/en/index.php

The Otto Group (Otto GmbH & Co KG) is a German retail company based in Hamburg that operates companies worldwide in the retail, e-commerce, financing, logistics and mail order sectors.[2][3] In 2023, the Group generated sales of €16.2 billion and had around 41,186 employees.[1]

History

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In August 1949, Werner Otto founded the company Werner Otto Versandhandel (Otto Versand) in Hamburg.[2][4] In 1950, the first catalogue with a print run of 300 copies was published, presenting 28 pairs of shoes on 14 hand-bound pages.[2][5] The following year, the first printed catalogue comprised 28 pages and offered an extended product range, which subsequently further diversified in the 1950s and included, among others, porcelain, bicycles, and electrical appliances.[6] After further expansion, Otto Versand moved into a 205,000-square meter building in 1960. The number of employees increased to 2,000.[7]

In 1969, the Hanseatic Bank was founded, through which customers could finance their orders. At the same time, the Werner Otto Foundation was established in Hamburg to promote medical research. When postal strikes and higher rates posed a threat to operations in 1972, the delivery service Hermes Versand was established.[2] In 1980, Otto Reisen GmbH was founded, marking the company's entry into the tourism industry.[8]

In 1981, Michael Otto, son of the founder, took over the company.[9] Throughout the following years, the Otto Group continued its expansion into Spain, Italy, Great Britain and other markets.[2] By 1987, the Otto Group was considered the leading mail order company worldwide.[3] After the fall of the Berlin Wall in 1989, sales also rose in Eastern Europe.[2]

The 24-hour express service was introduced in 1990[3] and Otto Group launched an online shopping website in 1995.[2] The catalogue, previously only available as a printed version, was published digitally on the internet for the first time in 1997.[5]

Otto Group entered the US market in 1998 by acquiring a stake in the Chicago-based furniture store Crate & Barrel.[2]

The two Austrian brands of the Otto Group, Universal and Otto, were bundled into Unito Versand & Dienstleistungen in 2003, and the mail order business in Germany was renamed Otto GmbH & Co KG. In 2005, the Otto Group sold 75% of the shares in Hanseatic Bank to Société Générale.[6]

In 2009, the Otto Group secured the rights to the Quelle brand and numerous retail brands such as Privileg in a bidding process. Later, in 2012, the Neckermann brand was acquired.[10] In 2014 the online fashion retailer About You was founded.[11]

In the 2015/2016 financial year, over 90% of mail order sales were generated online, making the Otto Group the second-largest German online retailer behind Amazon, according to a study by the EHI Retail Institute.[12]

The last printed edition of the Otto main catalogue was published in December 2018, as around 95% of all orders were received digitally by this point.[5]

In 2023, the Otto Group entered into cooperations with Covariant and Boston Dynamics.[13][14][15]

Corporate affairs

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The key trends of the Otto Group are (as at the financial year ending February 28):[16]

Year Revenue (€ bn) Net income (€ m)
2017 12.5 41
2018 13.7 516
2019 13.6 177
2020 14.3 214
2021 15.6 971
2022 16.1 1,814
2023 16.2 –413

Corporate structure

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The shares in the Group of Michael Otto and his son, Benjamin Otto, have been combined in a foundation since 2016.[17]

The Group operates over 100 companies internationally,[2] primarily in Germany, Europe, and the United States. The activities of the Otto Group's business include e-commerce, over-the-counter retail, and catalogue sales channels. In the 2023 financial year, the Otto Group generated revenue of €16.2 billion, of which around €12 billion was generated online, making the Otto Group one of the largest online retailers in the world.[1] The following is an extract of some subsidiaries:[1]

Platforms, brands, and retailers

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Services

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  • Baur Logistics
  • Evri
  • Girard Agediss
  • Hermes Einrichtungs Service
  • Hermes Fulfilment
  • Hermes Germany
  • Otto International
  • EOS Group
  • Hanseatic Bank

Sustainability

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Activities concerning sustainability are the responsibility of the executive board. These activities relate to both ecological and economic sustainability, which were anchored in the Otto Group's corporate objectives in 1986.[4] The Otto Group pursues a partnership with Save the Children, among others.[18]

In 2005, the Aid by Trade Foundation was created, which originated the initiative Cotton made in Africa. The cotton sourced from growers of the Cotton made in Africa initiative is used by the Otto Group and other textile companies such as ASOS and S.Oliver.[19]

Criticism

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In 2016, the UK branch of Hermes was criticized by The Guardian for paying its suppliers less than the minimum wage. Hermes couriers were self-employed and were paid based on the parcels delivered.[20] Hermes was again criticized by a major newspaper in 2021, when a The Times article published allegations about the mishandling of packages and bad customer service.[21]

References

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  1. ^ a b c d e f "Otto Group Annual Report" (PDF). Otto Group. Retrieved 21 January 2024.
  2. ^ a b c d e f g h i Tanner, Adam (5 March 2014). "Amazon's War On The House Of Otto, Germany's $18 Billion Family". Forbes. Retrieved 21 January 2024.
  3. ^ a b c Joseph, Ugesh A. (9 March 2016). The 'Made in Germany' Champion Brands. Routledge. pp. 35–37. ISBN 978-1-317-02503-0.
  4. ^ a b Brock, Christian; Streubig, Andreas (2014). "Nachhaltigkeitsmanagement am Beispiel der Otto Group – Herausforderungen, Strategie und Umsetzung". In Kenning, Peter; Kirchgeorg, Manfred (eds.). Sustainable Marketing Management (in German). Wiesbaden: Springer Fachmedien Wiesbaden. pp. 339–357. ISBN 978-3-658-02436-9..
  5. ^ a b c "Otto-Katalog wird nach 68 Jahren eingestellt". Focus Online (in German). 9 July 2018. Retrieved 21 January 2024.
  6. ^ a b "Zeittafel". Werner Otto Info (in German). Retrieved 21 January 2024.
  7. ^ "Riesiger Richtkranz". Hamburger Abendblatt (in German). 17 December 1955.
  8. ^ "Mit Otto ans Meer". Der Spiegel (in German). 25 December 1994. ISSN 2195-1349. Retrieved 22 January 2024.
  9. ^ Landler, Mark (11 September 2004). "For Spiegel Investor, a Hard Lesson in Securities Law". The New York Times. Retrieved 21 January 2024.
  10. ^ "Otto übernimmt Quelle-Markenrechte". Deutscher Fachverlag GmbH (in German). 5 November 2009.
  11. ^ Hofmann, Alex (25 May 2023). "About You hat bereits mehr Kunden als Otto.de – steigerte aber den Verlust um 100 Millionen Euro". Business Insider (in German). Retrieved 24 January 2024.
  12. ^ "Die 10 größten Online-Shops". W&V (in German). 20 September 2016. Retrieved 21 January 2024.
  13. ^ Kort, Katharina (12 September 2009). "Otto-Group setzt auf Roboter von Boston Dynamics". Handelsblatt (in German). Retrieved 24 January 2024.
  14. ^ Kolf, Florian; Alvares de Souza Soares, Philipp (9 May 2023). "Handelsblatt". Handelsblatt (in German). Retrieved 24 January 2024.
  15. ^ Evans, Scarlett (11 September 2023). "Boston Dynamics Robots to Increase Efficiencies at Otto Group Facilities". IOT World Today. Retrieved 24 January 2024.
  16. ^ "Annual Reports". www.ottogroup.com. Retrieved 2024-03-30.
  17. ^ "Michael Otto gibt Beteiligung in Stiftung". Handelsblatt. 1 April 2015. Retrieved 24 January 2024.
  18. ^ Probe, Anja (9 June 2022). "Hamburger bauen Partnerschaft mit Save the Children aus: Otto Group kämpft verstärkt gegen Kinderarbeit". TextilWirtschaft (in German). Retrieved 21 January 2024.
  19. ^ Schaer, Cathrin (27 March 2019). "German Retail Giant Plans World-First With Sustainability Bond Issue". Women's Wear Daily. Retrieved 21 January 2024.
  20. ^ Booth, Robert; Osborne, Hilary; Evans, Tara (18 July 2016). "Revealed: delivery giant Hermes pays some couriers less than living wage". The Guardian. ISSN 0261-3077. Retrieved 22 January 2024.
  21. ^ Bentley, Paul Morgan (17 December 2021). "Hermes: Our undercover reporter sees couriers manhandle parcels and customers mocked". The Times. ISSN 0140-0460. Retrieved 22 January 2024.

Literature

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