The History of the Otto Group
Start-up and early development
By establishing his mail-order company, Werner Otto wrote an important chapter in German post-war history. Within ten years, the mail-order company, whose product range consisted of just 28 pairs of shoes, had become a company with 1,000 employees and an annual turnover of DM 100 million.
Werner Otto founds mail-order company in Hamburg
At the age of 40, Werner Otto forms "Werner Otto Versandhandel" [Werner Otto Mail-Order Company] and registers it at the Hamburg State Ministry of Economy and Transport on August 17, 1949. Initially, Otto has three employees, with the company being based in two small buildings in Hamburg's Schnelsen district.
The first catalogue is published
The first catalogue is produced manually and comprises 300 hand-bound copies with photos pasted into them. Twenty-eight pairs of shoes are presented on 14 pages. Following its motto 'Trust for Trust', Otto is the first mail-order company to introduce payment by invoice.
First printed catalogue, expanded product line
The first machine-printed catalogue comprises 28 pages and offers an expanded selection of products. Besides shoes, the range now includes briefcases, raincoats, and trousers. Otto generates revenue of over DM 1 million with a total circulation of 1,500 catalogues.
Collective orders become even more attractive
The principle of collective ordering is perfected. Customers who order collectively for their neighbours, friends, and relatives are awarded a 5 percent discount. To this day, collective orders represent an important distribution path.
Turnover reaches DM 5 million
In less than two years, Otto increases its turnover by a factor of five. Catalogue circulation grows to 37,000 copies.
Introducing hard goods
Bicycles, porcelain, and electric appliances are now part of the product range. OTTO abolishes Saturday as a working day and introduces the five-day work week. Otto Versand moves its office from Schnelsen to Hamm in Hamburg. Turnover rises to DM 52 million.
Otto joins the big league
With a turnover of DM 100 million, Otto Versand is now one of Germany's major companies.
A new site for continued growth
On 13 August 1959, the foundations for a new company complex are laid in Hamburg's Bramfeld district. OTTO now employs 1,000 people.
Becoming a major player
In the 1960s, Otto Versand expands its position as a large-scale enterprise and pioneer of its industry. Turnover first surpasses the DM 1 billion threshold in 1970.
Move to Hamburg-Bramfeld
Otto Versand moves to its new premises in Hamburg's Bramfeld district, which remains the site of its headquarters to this day. Turnover is now DM 150 million. The number of employees grows to 2,000.
Collective buyer's orders total DM 1 million
Turnover from one collective buyer first passes the DM 1 million. The WAZ Group acquires a 25-percent stake in Otto Versand.
Introducing: phone orders
Otto blazes the trail: From now on, thanks to integrated data processing, orders can be placed via telephone at 61 10 81. General Shopping S.A. buys a 15 percent shareholding in Otto Versand.
A new investor
KG Gesellschaft für Beteiligungen und Investierung (later AURUM KG) buys a 10-percent stake in Otto Versand.
Werner Otto hands the reins to Günter Nawrath
Under its new Chairman & CEO Günter Nawrath, OTTO bucks the economic recession, achieving extraordinary growth of 35 percent - turnover rises to DM 582 million. The company opens its first purchasing office on the Asian continent, in Hong Kong. For the first time, the catalogue carries designs by celebrity fashion designers such as Nina Ricci, Christian Dior and Pierre Balmain.
Catalogue circulation at 1 million copies
The Autumn/Winter catalogue is 748 pages strong and has a print run of over one million copies. Otto Versand moves its administration and warehousing into two new buildings in Hamburg-Bramfeld.
The first special-interest catalogue
A specialogue for young people is now published alongside the main catalogue: the Post-Shop-Magazine.
Founding of Hanseatic Bank
The newly founded Hanseatic Bank makes it possible for OTTO customers to make their catalogue purchases on credit. The Werner Otto Foundation to promote medical research is formed in Hamburg.
Growing into a Group
For Otto, the 1970s revolved around expansion and the business' development to becoming a retailing and services group of companies.
Breaking through the billion mark barrier
In 1970, Otto enters a new dimension: with 4,800 permanent employees, the company generates a turnover of DM 1.168 billion.
Founding of Hermes Delivery Service
Otto Versand founds its own delivery service. By the end of the year, more than 50 percent of its orders are delivered independently of the German Postal Service.
International expansion begins
By acquiring a stake in 3 Suisses International, France (initially 25 percent, 50 percent since 1981), Otto sows the seeds of development to become an international corporation. The company also acquires holdings in Heinrich Heine, Karlsruhe (initially 50 percent, fully consolidated since 1981), and Hermes now delivers 90 percent of all Otto consignments.
Schwab Versand pushes Otto into global top 3
Otto Versand acquires the majority of shares in Schwab Versand, Hanau. This turns the Otto Group into the world’s No. 3 mail-order company behind the Sears Group in the US and Quelle in Germany.
Turnover exceeds DM 3 billion
The Otto Group now generates annual turnover of DM 3.176 billion and employs 10,740 people.
Entry into the Dutch market
Otto continues its international expansion and forms Otto Holland in Tilburg, the Netherlands. The Otto Group also buys up shares in the wholesaler Fegro-Großhandelsgesellschaft (GmbH & Co. KG). On 7 September, a treatment centre for cancer diseases opens its doors at the University Children's Hospital in Hamburg. It was substantially funded by the Werner Otto Foundation.
Internationalisation of the Group
Under the leadership of the new Chairman & CEO Dr. Michael Otto, the Otto Group became the largest mail-order group in the world.
Hermes delivers 100 millionth parcel
In eight years, the Hermes Delivery Service has delivered more than a hundred million parcels. The Otto Group sets up Otto Reisen GmbH, which offers Otto customers the full range of travel services from a catalogue.
Dr. Michael Otto is appointed Chairman & CEO
Günter Nawrath, Chairman of the Executive Board, moves to the Supervisory Board. Dr. Michael Otto is appointed Chairman of the Otto Group's Executive Board.
A stake in ’La Blance Porte‘
The Otto Group buys a stake in the mail-order company La Blanche Porte via the 3 Suisses International Group.
Environmental protection codified as corporate objective
Otto confirms its pioneering role in the mail-order business on the ecological front as well: the group codifies environmental protection as an official corporate objective.
Otto becomes the first German mail-order company to introduce 48-hour express delivery. The Otto Group takes shares in Alba Moda, Bad Salzuflen, forms Bon Prix, Hamburg, and Together, Great Britain, as well as Otto Sumisho, a joint venture with Sumitomo Corporation in Japan. The slogan of the Group’s new advertising campaign, “Otto...find’ ich gut” becomes a household phrase for decades. A Google search for the German-language slogan gets millions of hits.
Otto is the world's biggest mail-order company
The Otto Group acquires the mail-order companies Witt/Weiden and Venca (today C.I.F.D.), Spain, making it the biggest mail-order company in the world. Between 1987 and 1994, the Otto family buys back 80 percent of the 10-percent stake in AURUM KG sold in 1964.
Sportscheck and Moden Müller
Otto buys stakes in SportScheck, Germany, and ModenMüller (today OTTO), Austria.
Salve, Bella Italia!
The Otto Group enters the Italian market with Euronova.
Globalisation and diversification
German reunification led to a temporary boom in the German economy during the first half of the 1990s. The second half of the 1990s revolved around the new media and expanding the business through a variety of ventures in Asia and Europe. Otto expands its field of business by entering new market segments.
Economic boom following German reunification
German reunification brings market economics to the former East Germany and leads to a rapid increase in demand. OTTO introduces 24-hour rush delivery. Otto enters the Polish market, founding Otto Poland. Otto enters the Cash & Carry sector by founding Fegro/Selgros, a joint venture with the REWE retail group.
’Shop around the clock‘
Customers can now shop at OTTO 24/7. The Otto Group buys a majority stake in Grattan, the fourth-largest British mail-order company. VPC is founded in Portugal.
Entry into the Hungarian market
The Otto Group takes over the Hungarian mail-order company Margaréta. Hermes Delivery Service delivers its 500 millionth parcel.
Optimisation of customer service
24-hour delivery is now available for almost all articles. All customer centres can now be reached on a single hotline. Otto merges all its travel services in the OTTO Freizeit und Touristik [Otto Leisure and Tourism/OFT holding]. Dr. Michael Otto sets up the Michael Otto Foundation for Environmental Protection. It works to protect and preserve wetland habitats and water as a vital resource.
The Otto Group introduces delivery on a day nominated by the customer. OTTO becomes the first mail-order company to present its product range on an interactive CD-ROM.
Otto goes online
otto.de: Otto Versand’s extensive range of goods is now available online. An after-hours service is introduced: delivery of products until 9 pm. The Otto Group strengthens its involvement in wholesaling by participating in Germany’s second-largest computer distributor, Actebis.
Otto in Switzerland
In Zurich, the Otto subsidiary Heine takes over the mail-order segment of Jelmoli, which continues doing business as Jelmoli Versand.
New media on the advance
The complete Otto Versand catalogue is now published on the Internet. Otto increases its e-commerce, online, CD-ROM, and interactive videotext sales to DM 450 million, a good seven percent of the company's total turnover. The "Shopping 24" online portal and Otto Büro & Technik [Otto Office & Technology], today OTTO Office, are founded. Hermes Delivery Service delivers its one billionth parcel. The Otto Group forms joint ventures in South Korea, Otto Doosan Mail Order Ltd, and Taiwan, Otto Chailease Mail Order Ltd. Otto takes a share in the Baur mail-order company in Burgkunstadt. The demand for eco-friendly Otto products increases. With a turnover of DM 320 million from ecologically-focused textiles, Otto Versand enters the now-booming market for sustainable products at a very early stage.
Number of Otto Group employees exceeds 50,000
Otto acquires a stake in Crate and Barrel, Chicago, Illinois. In Germany, Zara Deutschland GmbH is founded as a joint venture with the Spanish Inditex Group.
Otto celebrates its 50th anniversary
On 17 August, the Otto mail-order company, nucleus of the Otto Group, celebrates its 50th anniversary.
The Otto Group acquires Peacock AG through the Actebis Group, and the British mail-order company Freemans, London.
Innovation for the future
Otto Group further expanded its innovation leadership in the new millennium. The Group offers new concepts of range and product to cater flexibly to changing consumer behaviour in the retail sector: customer purchases and orders reflect their immediate needs more and more closely – garden equipment in spring, swimwear in summer, new furniture in autumn, and down jackets before the first frost strikes. The initial spread of the Internet opens up new interactive sales channels. From the beginning, the Otto Group is a ‘first mover‘ committed to technical innovations and their use in multichannel retail. Modern sales channels such as the Internet, mobile phones and TV are some of the promising tools in opening up new markets: The more diverse a vendor’s choices, the greater chance it has of reaching customers. Customers can access merchandise anytime and from anywhere.
By exporting and multiplying concepts abroad, the Otto Group also meets growing international demand – e.g. for Western fashions among price-conscious customers in Central and Eastern Europe.
The Otto Group also opens its extensive range of logistics, transport, quality assurance and design services to companies outside the group. The Otto Group now successfully does business worldwide as a provider of retail-related services to its partners.
Otto Group is the worldwide no. 2 in B2C
The Otto Group founds discount24, travelchannel.de, Obi@Otto and acquires a stake in myToys.de. otto-office.com goes online. Ordering by mobile phone (using WAP technology) is now possible.The Otto Group becomes the world's number two online B2C vendor behind Amazon. In the UK, Hermes General Service UK founds Parcelnet.
Virtual fitting rooms at otto.de
The Otto Group and travelocity.com team up to found the Travelocity Europe joint venture. Hermes joins forces with the Netherlands’ Royal TPG Post to set up EP Euro Post. A virtual fitting room is installed at otto.de. Baur takes over Universal Versand, Austria.
Otto Versand becomes OTTO
The change of the company name from Otto Versand to OTTO reflects the company's evolution into an international trade and services group. The euro is introduced. OTTO counters consumers’ fears of inflation by issuing a price guarantee.
Hermes: an increasingly serious competitor for the German postal service
Hermes merges all its logistics services under the "Hermes Logistik Gruppe" umbrella brand. Hermes is the first to offer non-business customers a serious alternative for parcel delivery throughout Germany.
OTTO enhances delivery service
OTTO further enhances its nominate-date delivery service by adding an option for delivery within 3-hour time bands. OTTO teams up with the Israeli fashion label Castro to establish the joint venture Castro Deutschland.
OTTO publishes three main catalogues
A first in the German mail-order industry: OTTO now offers three main catalogues per year. Otto Group sells 75 percent of its shares in Hanseatic Bank to Société Générale, Paris. OTTO and Microsoft sign a strategic t-commerce partnership. To mark the 10th anniversary of its popular online shop, OTTO announces a new milestone in its e-commerce expansion: otto.de is to be expanded into a complete one-stop shopping destination.
Otto Group pushes forward in Russia
The Otto Group and Russia’s PPE Group (now Direct Group) set up a joint venture in Russia. First Lascana shops open in Hamburg and Baden-Baden. The Otto Group takes over OBI’s shares in the OBI@OTTO joint venture. The Otto Group completes its logistics chain for customers outside the group by founding Hermes Warehousing Solutions.
After 26 years on Executive Board, Dr. Michael Otto moves to Supervisory Board
Hans-Otto Schrader is appointed to succeed Dr. Michael Otto as the new CEO of the Otto Group in October.
The launch of the 3-D OTTO store is a quantum leap in online shopping. OTTO and Hagebau set up a joint venture called Baumarkt Direkt. Heine acquires the remaining 50 percent of shares in Manufactum. For strategic reasons, the Otto Group divests from the wholesale trade segment, and therefore sells the IT distributor, Actebis. The online product range at otto.de now comprises 500,000 items as well as the full online range of the bookseller Libri.de. Witt Weiden celebrates its 100th anniversary. In October Hans-Otto Schrader becomes the new Chairman of the Executive Board. OTTO is honoured for the best sustainability report of the year, otto.de is again voted as the “Most Popular Website” of the year. The Otto Group acquires all shares in its Japanese joint venture Otto Sumisho Inc., which is renamed OTTO Japan Inc. After buying back all shares held by co-shareholders, the Otto family again owns all shares in Otto (GmbH & Co KG).
Ambitious goal: cutting CO2 emissions by 50 percent
The Otto Group Executive Board adopts a climate protection strategy designed to reduce CO2 emissions continuously, producing sustainable results. All major companies in the Otto Group are committed to reducing their transport, mobility and operations-related CO2 emissions by 50 percent by the year 2020.
The Otto Group sells its shares in the Fegro/Selgros cash & carry wholesale markets to its long-standing joint-venture partner REWE. In order to optimise item sales forecasts, the Otto Group joins forces with Physics Information Technologies (phi-t) to set up the company phi-t products & services. Another new company is eVenture Capital: by setting up the eVenture Fund 1 in November, the Otto Group creates the basis for investments in new e-commerce technologies and innovations. The US furniture and household goods chain Crate & Barrel expands to Canada. In autumn, the acquisition of a majority stake in the NaDom Group turns the Otto Group into the market leader in Russian distance selling. The historic mail-order company Schwab decides to switch from being a generalist to specialising in large sizes, and selects the Sheego brand for this purpose.
The Otto Group’s core company OTTO runs a campaign spanning several months to celebrate its 60th anniversary with its staff and customers.
At the beginning of the year, the Otto Group acquires Limango, adding a successful private shopping club to its e-commerce portfolio. myToys.de celebrates its 10th anniversary. The Otto Group takes over the complete business of Quelle Russia from the insolvent Quelle Holding. In addition it acquires the European rights to the traditional Quelle brand and all its in-house brands, such as Privileg. In December, the Otto Group further enhances its leading position in the Russian market by acquiring the shares previously held by its partner, Russia’s Direct Group, in their joint ventures Direct Catalogue Service and NaDom. All logistics ventures in Germany, the UK, Austria and Italy are coordinated into the Hermes Europe umbrella brand. OTTO’s founder Prof. Dr. h.c. Werner Otto celebrates his 100th birthday.
Everywhere Commerce in focus
Several Group companies now achieve roughly two-thirds of their sales through e-commerce. This success enhances the Otto Group's position as the world's largest online retailer for fashion and lifestyle products and it is the world's second-largest vendor behind Amazon. In Germany the Otto Group reinforced its number one spot as the most pre-eminent e-commerce player (B2C). The Otto Group focuses on “Everywhere Commerce”. Activities in social media such as Facebook and Twitter as well as Smartphone and WebPad applications make online shopping go mobile.
E-commerce becomes most important sales segment
The Otto Group has an exceedingly successful business year, growing its revenues by more than 12 percent to 11.4 billion euros. The Group registers enormous growth, especially in the online sector, where its revenues increase by 25 percent year on year. A new e-commerce brand is also established: mirapodo.de.
Russia is a growth story as well: the Otto Group Russia nearly doubles its earnings, the growth that also is supported by the consolidation of Quelle Russia.
The company is named „Top Employer 2010” by the trade publication Textilwirtschaft.
OTTO’s founder Werner Otto dies, aged 102
On 21 December 2011, businessman and entrepreneur Prof. Dr. h.c. Werner Otto, founder of the OTTO mail-order company and the shopping centre development company ECE, died at the age of 102 at his home in Berlin. Werner Otto was one of the last living post-war trade pioneers, who had considerable influence on the Federal Republic’s economic, socio-political and social development due to their visionary power, distinctive inventiveness, and entrepreneurial courage.
The Otto Group sharpens the focus of its values in the new mission “The Power of Responsibility”. The four different areas are profitability, innovation, diversity and sustainability. These apply to each and every co-worker, for nearly 50,000 people in 20 countries.
Bonprix celebrates the company’s silver jubilee and its record turnover in 2010/2011. ALBA MODA from Bad Salzuflen celebrates its 30th anniversary. Established in 1981 as a mail-order provider of doctors’ and chemists’ workwear, the company is now an international multichannel provider of Italian-inspired, on-trend fashions
The Otto Group launches operations in another BRIC country Brazil, pursuing a three-pronged strategy with activities planned in the E-Commerce, Services and Financial Services segments. The EOS Group acquires a 60 percent stake in Hoepers Recuperadora de Crédito S. A., one of the top three debt collection companies in Brazil.
The return of a household brand: Quelle is relaunched under www.quelle.de, a fully-owned subsidiary of the Otto Group and a new Internet marketplace. A range of retailers offer their products on this new platform in the segments Electronics & Home, Garden & DIY and Sport & Hobby.
OTTO launches an Augmented Reality Shop on its Facebook fan page. Users of the social network can try on items from the OTTO collections in front of their webcam, take photos of themselves and share them with their friends.
60 years of Heine! The mail-order company thanks its customers for their loyalty under the slogan ‘Heine says thank you’.
Investment in new markets and technologies
Following the successful expansion into Russia, the Otto Group is now driving forward its entry into the BRIC country Brazil to drive forward the e-commerce business in the South American country. Together with mail order company Posthaus, the Otto Group has founded DBR as a joint venture, in which the Hamburg company enjoys a slight majority shareholding.
Project A Ventures was founded in the same year by its managing directors Florian Heinemann, Uwe Horstmann, Thies Sander and Christian Weiss in cooperation with the Otto Group. The company remains the leading investor with 50 million euros of committed capital.