Otto Group

Hoover's description: "Otto GmbH & Co KG has the mail-order business in the bag. The world's largest mail-order company sells merchandise in about 20 countries through more than 100 subsidiaries. Customers order through more than 600 print catalogs, as well as through CD-ROM catalogs and the Internet. The firm sells products from clothing to appliances to sporting goods. Otto also owns a majority stake in the Euromarket Designs (a.k.a. Crate & Barrel) housewares chain, and it owns travel agencies in Germany. The family of executive board chairman Michael Otto owns the majority of the company; in 2005 it sold off its longstanding controlling interest in US catalog company Spiegel (now Eddie Bauer Holdings). "

Company History
Werner Otto established a mail-order company in 1949. Within ten years, the venture turned into a large-scale enterprise, employing 1,000 people. During the 1960s, the Otto Versand expanded its position as a large-scale enterprise and pioneer of its industry. In 1974, the company expanded into France, buying into 3 Suisses in France. By 1981, Michael Otto, the founder's son, takes over as chairman of the executive board. In 1986, environmental protection becomes a specific corporate objective of the group. By 1987, the company is the largest mail order company in the world. In the first half of the 1990s, in the wake of the reunification, the western German economy boomed for a time. Otto's activities during the second half of the 1990s were characterised by doing business in the new media sector and by reaching top positions among mail-order companies through various business activities in Asia and Europe. By entering new market segments, Otto increasingly relied on far-reaching diversification strategies. 

Historical Financial Information
Financial results for 2005/06 & 2006/07

Business Strategy
"STRATEGY: The companies in the Otto Group systematically create positive shopping experiences for customers by providing new, demand-driven offerings, leading-edge distribution concepts, and innovative services. Innovative catalogues, award-winning online shops and a growing number of attractive retail stores successfully enhance the merchandise appeal of the entire fashion, living and technology range. As a network of companies that do business worldwide, the Otto Group puts its international experience and expertise to use for especially attractive travel, logistics and financial services offerings. SEGMENTS:In the Group’s core segment, multichannel retail, the focus during the past year was on stabilising and evolving the traditional mail-order operations, developing the e-commerce sector, and building the over-the-counter business. The segment succeeded in turning its revenue performance around with a number of activities, and registered a 0.2 percent increase. The Otto Group’s full-range mail-order companies also reported a gratifying development. By implementing innovative catalogue and Internet concepts, they were able to outperform the market in Germany and remained nearly on par with the previous year, closing with only a slight revenue decline of 0.9 percent. The services segment, which mainly comprises the Hermes Logistik Gruppe and the OFT-Group, again experienced the steepest growth within the Otto Group. The financial services segment also posted a positive performance, thanks to accelerated internationalisation - especially in the countries of southern and eastern Europe - and an extension of the product portfolio. The wholesale segment, consisting of the Actebis-Group and the Fegro/Selgros joint venture (which is reported using the equity method), also grew its revenue thanks to customer loyalty measures and positive stimuli from e-commerce. OUTLOOK: The Otto Group has defined its strategic goal in “Vision 2020”: to become the most profitable, global group of retailers and commercial service providers, based on leading-edge business concepts. It operates by the motto: “There’s no such thing as a bad market, there are only companies that cater more or less successfully to a market. Innovation is the key to success.”"

Political and Public Influence
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Corporate Accountability
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Labor

 * 1996: Otto Group adopts code of conduct
 * 1999: company joins Global Compact
 * 1999: Otto Group becomes signatory of SA8000 ("Companies with signatory status commit to developing a plan to bring designated company-owned and supplier facilities into compliance with the SA8000 standard over a period of time.
 * 2005: company joins Business Social Compliance Initiative (BSCI)

Campaigns:
 * 1996: German Clean Clothes Campaign entered discussions with company about its responsibilities towards workers in production factories after a postcard campaign. "As it turned out in a first talk between the German Clean Cloth Campaign" and the OTTO VERSAND on September, 23rd, 1996 in Hamburg and since then in the exchange of letters, the company is aware of a further need for action with regard to the implementation of a socially viable trade policy and therefore is searching among others the cooperation of church, charitable and unionist non-governmental organisations as well as of supranational organisations."
 * 1999: The Indonesian Prosperity Trade Union (SBSI), reports that 835 of its members have been fired by PT Aneka Garmentama, a clothing manufacturer in North Jakarta which produces for Gap Inc., Donna Karen, Eddie Bauer (owned by Otto Group at the time), Polo Ralph Lauren and Tommy Hilfiger. The workers were dismissed on August 12 after a one-month strike for fair compensation and after initiating grievance proceedings at the Department of Manpower. Labor rights advocates also will contact PT Aneka Garmentama]'s other major U.S. buyers and urge them to investigate the labor practices of the factory. [11]

Major reports: Asia Monitor Resource Center. 1997.''The catch in garment production. Working conditions in the Chinese and Philippine garment industries with emphasis on supplier's factories of German companies'' Clean Clothes Campaign. Company Profile Otto Versand Maquila Solidarity Network. 2006. Revealing Clothing: 2006 Transparency Report Card

Environment

 * "In 1997,OTTO became the world’s first trading company to earn a DIN/ISO certificate for its environmental management. As part of implementing its environmental standards, the company identified five areas of operation that create a significant impact on the environment: textiles purchasing, hard goods purchasing, transport and traffic, packaging, and catalogues and advertising materials.The certified environmental management system involves regularly setting targets in these areas of operation, to be achieved by a set deadline."
 * "By various product information and quality seals. 98 percent of all textiles sold by OTTO bear a “non-toxic and skin-friendly” label.They fulfil requirements based on the established Öko-Tex-Standard 100, some of which go well beyond legal requirements.The cotton used in the “Pure Wear” line of clothing is certified organically grown. OTTO also began offering “Cotton made in Africa” fashions in spring of 2007.The project initiated by Dr. Michael Otto promotes environmentally and sociallyfriendly cotton production in Africa and its sale in Western Europe."
 * "As part of its systematic, DIN EN ISO 14001-certified environmental management,OTTO cut its transport-related CO2 emissions by 51 percent between 1993 and 2004.The company is currently developing an ambitious Group-wide climate protection strategy with the aim of significantly reducing CO2 emissions by 2020. Initial measures on this front are to be adopted in summer of 2007."

Anti-Trust and Tax Practices

 * 2004: Michael Otto, chairman of the Otto Group, failed to disclose the depth of financial problems of the American mail-order company Spiegel, owned by the group. Mr. Otto was investigated and fined by the Securities and Exchange Commission (SEC).

Social Responsibility Initiatives
"As an expression of its belief in and commitment to corporate social responsibility,OTTO has regularly published a sustainability report since 2000. In 2003, the sustainability report was first drawn up in compliance with the guidelines issued by the Global Reporting Initiative (GRI). It renders an exhaustive account of OTTO’s efforts to reconcile business, ecology and social responsibility and bears them out with extensive information and facts. In 2005, the sustainability report was listed at No. 3 in the sustainability ranking published by the Institut für ökologische Wirtschaftsforschung GmbH (IÖW – Institute for Ecological Economy Research) and the Initiative Zukunft e.V. (“Future Initiative”).The new sustainability report will be published in 2007."

Lines of business

 * 1) retail
 * 2) financial services
 * 3) service
 * 4) wholesale

Units/subsidiaries

 * 1) 3 Suisses International Group
 * 2) Apart International GmbH
 * 3) Baur Group
 * 4) Baumarkt direkt GmbH & Co KG
 * 5) bonprix
 * 6) Business Service
 * 7) Castro Deutschland
 * 8) Cofidis
 * 9) Crate and Barrel
 * 10) Discount24.de
 * 11) Direct Catalogue Service
 * 12) EOS Group
 * 13) Fegro/Selgros
 * 14) Frankonia
 * 15) Hanseatic Bank
 * 16) Hanseatic Versicherungsdienst GmbH
 * 17) Heine Group
 * 18) Hermes Logistik Group
 * 19) Hermes Warehousing Solutions
 * 20) Mondial Relay
 * 21) myToys.de
 * 22) OTTO (individual company)
 * 23) OTTO Doosan Mail Order Ltd.
 * 24) OTTO Freizeit und Touristik Group
 * 25) OTTO Japan Inc.
 * 26) OTTO UK (Grattan/Freemans)
 * 27) Parcelnet
 * 28) PrimeMail
 * 29) Schwab Group
 * 30) shopping24 GmbH
 * 31) SportScheck
 * 32) TNT Post AG
 * 33) Witt Weiden
 * 34) Zara Deutschland

Brands
Retails major international brands, such as adidas, Puma, Tommy Hilfiger, as well as private label.

Suppliers
Identified suppliers:
 * Fashion Garment (China)
 * Li An Garment (China)
 * Heo Shing Garment (China)
 * Shenzen Fulide Industry (China)
 * Syncom INdustries (Philippines)
 * K-Phil (Philippines)
 * Twinworld (Philippines)
 * Europhil Textile (Philippines)
 * Filflex Ind'l Et MFG (Philippines)
 * Monasteria Knitting (Philippines)
 * Selma Apparel (Philippines)
 * Cunji Int'l Phils (Philippines)
 * Jenny Garments (Philippines)
 * Ambassodor Knitting (Philippines)
 * Hammer Garments (Philippines)
 * Topkapi (Turkey)

Competitors

 * Arcandor
 * Lands' End
 * METRO AG

Financial Information (as of DATE)
Ticker Symbol: Main Exchanges: Investor Website:

Primary industry ranking
Fortune Global 500 2007 rank: 265 (previous rank 363)

List of largest shareholders
"The shareholders of the Otto Group announce that the Otto family has again united all shares in Otto (GmbH & Co KG) into its possession. The OTTO Aktiengesellschaft für Beteiligungen (OTTO public limited company for investments), Hamburg – the investment company of the Otto family – took over E. Brost & J. Funke GmbH & Co. KG from the other shareholders, and therefore the remaining 25 per cent in Otto (GmbH & Co KG), Hamburg, on 31 December 2007." 

Largest Shareholders

Countries of operation
Austria, Belgium, China, Czech Republic, Denmark, France, Germany, Great Britain, Hungary, Italy, Japan, Korea, Netherlands, Norway, Poland, Portugal, Romania, Spain, Slovakia, Switzerland, Taiwan, U.S.A.

Executives

 * Hans-Otto Schrader, Chairman of the Executive Board and Chief Executive Officer (CEO) Otto Group
 * Dr. Rainer Hillebrand, Vice Chairman of the Executive Board Otto Group, Board Spokesman OTTO, Member of the Executive Board, Marketing, Sales, E-Commerce OTTO,
 * Alexander Birken, Member of the Executive Board, Human Resources and Controlling OTTO, Chief Human Resources Officer
 * Dr. Willi Darr, Member of the Executive Board, Merchandising OTTO, Diethard Gagelmann, Hamburg, Member of the Executive Board, International Procurement Otto Group
 * Peter Gelsdorf, Member of the Executive Board, Development and Strategy Otto Group
 * Dr. Wolfgang Linder, Member of the Executive Board, IT and Logistics Otto Group
 * Juergen Schulte-Laggenbeck, Member of the Executive Board, Chief Financial Officer (CFO) Otto Group
 * Dr. Winfried Zimmermann, Member of the Executive Board, Human Resources and Controlling Otto Group

Board members & affiliations

 * Dr. Michael Otto, Chairman of the Supervisory Board
 * Prof. Dr. h.c.Werner Otto, Honorary Chairman & company founder
 * Hans Jörg Hammer, Chairman (General Manager (retired))
 * Uwe Rost, Deputy Chairman (Chairman of the Works Council, Otto (GmbH & Co KG))
 * Wolfgang Abel, Secretary (Salaried Employees' Union ver.di)
 * Thomas Armbrust, (General Manager Kommanditgesellschaft CURA Vermögensverwaltung G.m.b.H. & Co.)
 * Horst Bergmann (Chairman of the Works Council, Baur Versand (GmbH & Co KG))
 * Jürgen Bock (Division Manager Corporate Development and Corporate Culture, Otto (GmbH & Co KG))
 * Dr. Thomas Finne (General Manager, Kommanditgesellschaft CURA Vermögensverwaltung G.m.b.H. & Co.)
 * Manfred Gass (Chairman of the General Works Council, HERMES Logistik GmbH & Co. KG)
 * Dr. Thomas Gerstner (General Manager BTV Beteiligungsverwaltung GmbH)
 * Günther Grotkamp (Attorney)
 * Wilhelm Harnoth, (Chairman of the Works Council, Josef Witt GmbH)
 * Herta Heuberger (Chairwoman of the General Works Council, Sport-Scheck GmbH)
 * Siegfried Kockmann, (General Manager (retired))
 * Dr. Michael Lichtenauer, (Attorney)
 * Ulrich Meinecke (Deputy Regional Manager, ver.di Hamburg (Union))
 * Alexander Otto (Chairman of the Management, ECE Projektmanagement G.m.b.H.& Co.KG)
 * Jürgen Schenk (Regional Manager ver.di (Union))
 * Monika Vietheer-Grupe (Chairwoman of the Works Council, bon prix Handelsgesellschaft mbH)
 * Prof. Dr. Peer Witten (Chairman of the German Logistics Association (BVL), Bremen)

Contact Information
Wansbeker Str. 3-7 Hamburg 22172 Germany Tel.: 49-40-64610 Fax: Web site: http://www.ottogroup.com