Otto closes the Mytoys subsidiary and lays off 800 employees

Headquarters of the Otto Group

Despite high investments, the turnaround of the Mytoys subsidiary did not succeed.

(Photo: imago/blickwinkel)

Dusseldorf The Otto Group has decided to discontinue the business operations of its subsidiary Mytoys. The toy retailer’s 19 stationary shops will be closed.

The Mytoys administration in Berlin will also be given up. The measures should be implemented by February 2024 at the latest.

Sebastian Klauke, who is responsible for e-commerce on the Otto Group’s board of directors, said that the company found this decision extremely difficult. “In view of the business model, which has been in deficit for years, we had no other alternative even after intensive examination,” he explained.

Around 800 employees are affected by the site closures. The management will negotiate a reconciliation of interests and a social plan together with the works council in order to mitigate the consequences of the decision for the employees, the company said.

Mytoys’ business has been bad for years. However, the two boom years for online trading during the corona pandemic had temporarily covered that up. In the past year, however, sales in the entire German online trade fell by 8.8 percent according to the online trade association BEVH.

Apparently, this also caused the situation at Mytoys to escalate. Especially since, according to the figures from the BEVH, families with children in particular cut their spending on e-commerce last year due to the increasing burden. For example, spending on online purchases fell by double digits, especially in the middle age groups.

The Otto Group does not give exact figures for Mytoys. However, she announced that the company had not achieved solid economic performance and the required sustainable profitability “despite multiple strategic realignments and high investments”.

Shopping club Limango is not affected by the closure

Against this background, the success of an absolutely necessary turnaround, combined with further high investments and increasing cost and market pressure, can neither be planned seriously nor realistically, according to Otto.

In the 2021/22 financial year, the Mytoys Group reported sales of 905 million euros, which was only 1.2 percent higher than the previous year’s sales. However, this turnover also includes the Limango shopping club, which is not affected by the cessation.

Limango had grown by 13 percent in the same period and thus exceeded the threshold of 400 million euros. This means that Mytoys lost sales even then and fell back below the 500 million euro mark. This trend is likely to have intensified in the current financial year.

However, the Otto Group wants to continue the Mytoys brand. Toys are to be offered on the platform under it. “The transformation of into a platform is progressing rapidly,” said Otto board member Klauke. “We want to use the success of the marketplace model to take even greater account of the importance of the high-growth but also highly competitive toy segment in the future.”

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