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 1949 in Germany, the Otto Group is today a globally operating e-commerce and service Group with around 43,000 employees in 30 significant corporate groups, primarily present in the three economic areas of Germany, the rest of Europe, and the USA. Its business activities extend to the Platforms, Brand Concepts, Retailers, Services, and Financial Services segments. In the 2021/22 financial year (28 February), the Otto Group generated revenue of EUR 16.1 billion. With online sales of around EUR 12.1 billion, the Otto Group is among the world’s largest online retailers. The Group’s main strength is its broad-based presence with various ranges of products for diverse target groups in important regions around the world. A number of strategic partnerships and joint ventures offer the Otto Group outstanding conditions for the transfer of know-how and the use of synergy potential. A high degree of entrepreneurial responsibility and the Group companies’ will to collaborate guarantee both flexibility and customer proximity along with optimal appeal to target groups in each country.