Otto Sales Outside Germany Top 50 Percent for First Time

HAMBURG, Germany – For the first time in its 50-year history, Otto Versand, the world’s largest mail-order house, made more than half its sales outside Germany, boosting sales by almost 23 percent.

Preliminary figures for 1999, released earlier this spring, showed that the global enterprise, which owns Spiegel, Eddie Bauer, Crate & Barrel and Newport News in the United States, had sales topping 40 billion Deutsche marks.

At current exchange rates, that is 20.3 billion euros and a shade under $20 billion. It should be noted, however, that the mark was higher during much of the year under review. The numbers do not include sales in China, Korea and Taiwan, markets in which the company is active.

Retail sales in Germany have been stagnating for several years, but Otto managed to boost turnover by 15.5 percent to DM 19.4 billion, or about $9.5 billion.

Most of the domestic growth, however, did not come from the company’s traditional catalog businesses but from its computer distribution arm, the Actebis Group, which in January 1999 acquired Peacock AG. Computer sales totaled DM 7.4 billion, up from DM 3.8 billion in 1998.

The fastest foreign growth was recorded in North America, where the Spiegel Group, encompassing Eddie Bauer, Spiegel and Newport News, racked up sales of $3.4 billion, up 9 percent over $3.1 billion in 1998. Crate & Barrel had sales of $578 million, up from $496 million.

Growth in Europe and Japan was far more modest. The Grattan Group in the United Kingdom was stable, and the French 3 Suisses Group grew by 3.4 percent, while in Japan the Otto-Sumisho venture dropped 1.1 percent, which, given Japan’s sagging economy, was “fair,” an Otto statement said.

The company continued to shift traffic to the Internet with Web-based sales tripling in Germany to DM 120 million, enough, Otto said, to make it Germany’s Web market leader. Worldwide Internet sales totaled DM 450 million, or $220 million.

CEO Michael Otto said in a statement that he expected e-commerce to take 5 percent market share from Germany’s retail and mail-order business over the next five years.

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