GOtto made it just like that. The trading group generated a result of 22 million euros in the last financial year, which is slightly more than one per thousand of the revenue with sales of 16 billion euros. It almost seems as if you had done a bit of back and forth calculations until the number was really positive, mind you, before taxes and interest. Alexander Birken avoids the word “loss”.
The CEO of the Otto Group does not use it himself, and the nine-page press release for the balance sheet press conference also does not contain this information: Otto made a loss of 413 million euros in the past financial year, which began on March 1, 2022, a few days after Russian invasion of Ukraine.
Moving times – and that has “impacted one to one” on the business, says Alexander Birken. He recalls that back then, double-digit growth was still expected for the mail order business, but in reality the market had shrunk by 9 percent – a difference of 20 percent. That alone explains a lot.
Cautious customers with empty shopping carts
While goods were still being ordered diligently at the beginning of the financial year (preferably a little more because the supply chains were so fragile), customers suddenly became more cautious, their shopping baskets were no longer so well filled. The stocks at Otto, on the other hand, grew, as did the pressure to sell the goods at discounts, and profit margins melted away.
But, as Birken emphasizes, who after studying at the Hamburg Business Academy spent almost his entire professional life at Otto: “We are tried and tested.” Because of the excellent business during the corona pandemic, Otto also acts from an extremely solid basis: “We steer with a steady hand.”
That sounds reassuring, even when Birken mentions that consumer sentiment in this country is worse than ever. The relaxed atmosphere does the rest in this event room called “Collabor8”, which avoids the impression of concentrated work and clear facts in the New Work Style. Stacks of packages with the logos of corporate brands can be seen in the background.
Customers are prepared for ethical consumption
Next to it hangs a “Cradle to Cradle” collection, a few fashion items that meet the highest standards of sustainability, from resources to recycling. Alexander Birken is convinced that customers want ethical consumption, and he takes the opportunity to point to traceless plastic-free packaging on a shelf, without mentioning how intensively this is already being used and whether there is any progress.
Alexander Birken is a narrator. It’s about the live shopping shows, in which he sees a lot of potential, or it’s about digital health as a future business. Anyone who remembers the verve with which he reported on the opportunities offered by telemedicine last year can assume that during the crisis there was apparently not a bit of progress in this field.
A three-digit million amount is earmarked for “investments and innovations with high strategic relevance” for the new financial year, after all, one wants to be prepared for the upswing when it comes. Now, says Alexander Birken, the priority is the result. Of course, numbers and graphics appear on the screen when the Otto boss talks about the business and his strategy, but financial analysts would despair of him.
From Amazon to Zalando, most of the competitors are listed, but the Otto Group is a family company, with 80-year-old Michael Otto at the head of the supervisory board. The patriarch will soon have to decide whether Birken’s steady hand seems suitable for him to withstand the rough times for longer – because the age limit for board members in the Otto Group is actually 60, and Alexander Birken will reach that next year. It’s not his birthday until November, he says when asked, which is why it shouldn’t be decided until the beginning of 2024 whether he should remain Otto’s boss for a longer period of time. Either way, he will remain connected to the Otto Group, says the father of four: “This is my second home after all.”