The Executive Board and shareholder bodies of the Otto Group retail and services concern have decided only to offer the Mytoys brand on the OTTO platform in future. In the highly competitive and low-margin toys market, the current multichannel concept is no longer viable. The decision means the closure of the Mytoys headquarters in Berlin as well a total of 19 stores by February 2024 at the latest.
Around 800 employees of Mytoys.de GmbH will be affected by the closures. Company management is now looking to negotiate a reconciliation and social package in collaboration with the works council and to mitigate the consequences for the employees. Large parts of the teams will however initially continue to work on operations in the coming months.
Sebastian Klauke, Executive Board member for E-Commerce, Technology, Business Intelligence and Corporate Ventures, Otto Group: “Of course, this decision was extremely difficult for us, especially in view of the dedicated and professional work of all of our Mytoys employees. However, after reviewing the business model – which has been making a loss for years – we had no other alternative. At the same time, we still believe in the Mytoys brand and want to offer the toys segment a new, attractive stage on otto.de.”
The decision to discontinue the business operations of Mytoys.de GmbH is the result of a thorough analysis of the company's business development. For some years now – excluding the growth effects associated with COVID-19 measures undertaken in both 2020/21 and 2021/22 – the company has failed to perform well and has not achieved targeted levels of sustainable profitability despite multiple strategic realignments and considerable investments.
In the light of this, any plans to effect significant change necessary for any turnaround are unlikely to succeed. The required level of investment and the increasing pressure from the market and on rising costs would make such endeavours unrealistic. Furthermore, the highly competitive, low-margin toy segment is easier to manage profitably within OTTO's marketplace – with the corresponding diversification in the product ranges – than would be possible for a pure player like Mytoys.
Sebastian Klauke: “The transformation of otto.de into a platform is moving along nicely. We intend to leverage the success of this marketplace model to exploit this strongly growing, but also highly competitive, toys segment in the future. Within Q4 of 2023, we will be beefing up our product range in this area, making it even more attractive for our customers. And by showcasing the Mytoys brand, that’s exactly what we will do.”
The decision will have no operational impact on the Otto Group company Limango, previously under the Mytoys Group umbrella. Limango has achieved success with its business model of a private shopping community for families and plans to continue to grow independently and profitably in the long term.
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Founded in Germany in 1949, today the Otto Group is a globally active retail and services group with around 41,000 employees in 30 major company groups primarily active in the economic regions of Germany, the rest of Europe, and the USA. Its business activities span the Platforms, Brand Concepts, Retailers, Services and Financial Services segments. In the 2022/23 financial year (to 28 February) the Otto Group generated revenues of 16.2 billion euros. With online revenues of approximately 12 billion euros, the Otto Group is one of the world’s largest online retailers. The Group’s particular strength is the broad market presence of its differentiated product assortments and service offers to diverse customer target groups in the world’s relevant economic regions. Numerous strategic partnerships and joint ventures provide the Otto Group with excellent opportunities to transfer know-how and leverage areas of synergy potential. Group companies demonstrate a high degree of corporate responsibility and willingness to collaborate with one another; at the same time this guarantees flexibility, customer proximity and optimal target-group appeal in their respective national markets.