In times of war, uncertainty and consumer restraint, the Otto Group faces the challenge of becoming stronger than ever before. In our interview, the new CEO Petra Scharner-Wolff and the new Chairman of the Supervisory Board Alexander Birken explain the strategic tools that will be used to continue the journey under fresh management and which values should still play a role in this.
We need to keep inspiring our customers, time and again.
Ms. Scharner-Wolff, you have been at the helm of the Otto Group for around a hundred days. How does it feel?
Petra Scharner-Wolff: Excellent! On the one hand, I’ve been with the Group for over twenty years, so many things are familiar to me. On the other hand, though, I am currently touring the Group companies to discuss our strategic agenda with colleagues on site. I find the process very refreshing, inspirational and also challenging.
The political and economic environment remains challenging. What does this mean for a retail and services group like the Otto Group?
Petra Scharner-Wolff: We are keeping a close eye on current developments. We have experienced considerable political and economic upheaval since the start of the war in Ukraine. And current political developments are, if anything, exacerbating the situation. There is a risk that people’s confidence in the future will continue to decline moving forward. So what will this mean for our global business? We will have to keep inspiring our customers and at the same time deal with other challenging circumstances such as disrupted or altered supply chains and increasingly fierce competition. We do not expect the market to provide tailwind in this year or the next. Instead we will have to build our own success.
Under your aegis, Mr. Birken, the Otto Group has consistently been ahead of the competition with the quality of its products and its enduring commitment to the environment and social issues. These days, many customers have become more price-sensitive than before, and companies are quitting climate alliances and diversity programs in droves. Are we experiencing the end of the Otto Group’s successful model?
Alexander Birken: Not in the slightest. Climate protection is still the most pressing issue for humanity. And this truth will remain, even in challenging times and when people are having to count every euro and cent. But the biggest problem that society is facing right now are completely unnecessary culture wars and the fight for interpretational sovereignty, which are damaging us all. We are not going to abandon our values now because of political pressure from certain directions. The Otto Group’s shareholders, management and employees have upheld these values for many decades. They are firmly anchored in our corporate culture and will remain so.
How important are these values to you personally?
Alexander Birken: They are the Otto Group’s compass and have pointed in the right direction for the Group and, over the last eight years, for me personally as Chairman of the Executive Board. This was true during the great upheaval, the turmoil caused by the COVID-19 pandemic and especially during the last, very difficult three years with their political and economic crises. It is only because we have embraced a shared set of values – entrepreneurship, openness and trust – that we have been able to overcome the important technological, structural and cultural transformation processes in the Otto Group.
In what condition did you hand over the Group?
Alexander Birken: Petra Scharner-Wolff, the Executive Board and all employees achieved an important turnaround over the past financial year. In response to the consumer crisis, we have led the Group with a focus on earnings and liquidity rather than on sales growth and have again achieved very positive figures at all earnings levels. This is a major achievement and a solid foundation for the tremendous journey that the Otto Group will embark on under Petra.
We will not abandon our values.
Ms. Scharner-Wolff, you have a strategic agenda in your bags. Is there a goal to which you feel a particular commitment?
Petra Scharner-Wolff: There is one thing I try to make clear, especially at a time of increased competition: Nothing is possible without satisfied, even inspired customers. Our marketplaces and brand concepts are persuasive with their strong quality products, unique ranges and diversified services worldwide. What is more, we continue to demonstrate that value-based action and economic success are not necessarily mutually exclusive and that value propositions encourage customers to buy from us.
Will returns and liquidity remain the priorities?
Petra Scharner-Wolff: Faced with highly volatile markets, my clear goal is to continue increasing our financial robustness, which will enable us as a Group to continue investing sustainably in the medium term. We will grow the profitability of our individual business units. Consolidation of the portfolio and restructuring are therefore important tasks and key factors to ensure the future viability of our Group.
Will the previous “focused growth strategy” continue?
Petra Scharner-Wolff: Our focused growth strategy over recent years has laid the foundation for the Group’s current strength. We are now placing an even clearer focus on scaling relevant and successful business models in Europe and North America. These include otto.de, Crate and Barrel in North America and Eos worldwide. This will deliver a growing share of international business in the medium and long term. And it is very clear: Growth will then return – vigorously.
Can you describe the role of AI and the company’s cultural change?
Petra Scharner-Wolff: Generative AI and technology as a whole are obviously changing the game. Competitive technological expertise in all processes and at all levels remains the key to future success. We are particularly concerned about the impact of technology on business and the pace with which we can upscale this area for our customers. So this is where cultural change comes into play. Even including the factors I mentioned earlier, the focus will be on a performance culture going forward. Openness, honesty, creative leeway – we are determined to create an emotional image that informs the desire to shape and develop our culture.
A final word on something that affects you both, namely the generational change at the Otto Group.
Alexander Birken: I am very much looking forward to working with the shareholders and the Executive Board in my new role and am confident that we will find the best way forward. I will certainly support everyone involved to the best of my ability. Petra Scharner-Wolff: The effects of the generational change are felt throughout the Group and not just at shareholder level and on the Executive Board. In particular, a fresh generation of bold and optimistic managers is ready to take on the challenges we will face in the years ahead. I am looking forward to this joint work in particular.
The interview was conducted by Thomas Voigt, Vice President Group Corporate Communications & Public Affairs.
