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Consumption crisis: Otto Group slides deep into the red

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Consumption crisis: Otto Group slides deep into the red
Hamburg consumer crisis

Otto Group slides deep into the red

Alexander Birken, CEO of the Otto Group, looks at worse numbers

Alexander Birken, CEO of the Otto Group, looks at worse numbers

Source: dpa

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A profit of 1.8 billion euros at the Hamburg retail group turns into a minus of 414 million euros within a year. And the outlook for the people of Hamburg is also not very optimistic.

Dhe high inflation and the slump in consumption following the Russian attack on Ukraine pushed the Otto Group into the red. The bottom line for the service and retail group in the 2022/23 financial year (until the end of February) was a loss of 413 million euros, after a profit of a good 1.8 billion euros in the previous year. That goes out on Wednesday in Hamburg published annual report. At EUR 16.2 billion, sales were at the level of the previous year (EUR 16.1 billion).

“The figures show that we were not able to escape the market trend either. The very eventful and moving times against the background of the terrible war in Ukraine, the energy crisis, inflation and the associated slump in consumption are also reflected in our business,” said CEO Alexander Birken. One cannot be satisfied with the financial year. In addition to numerous brands, the Otto Group also includes the online fashion retailer About You. The result was also due to the fact that Otto had pre-ordered large quantities of goods in view of “completely different economic forecasts” and had to hit them with discounts in the doldrums. Contrary to what was predicted, online trading in particular has shrunk, a business that has grown strongly at Otto in previous years.

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For the current 2023/24 financial year, which began in March, the Otto Executive Board is only very cautious. “There will be normalization again, but I can’t say when,” said Birken. Sales at the previous year’s level and earnings before interest and taxes (EBIT) in the low three-digit million range are expected, as CFO Petra Scharner-Wolff said. In 2022/23, the EBIT was only 22 million euros. This means that it cannot be ruled out that the current year will once again end in the red.

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