Otto, Redcats prepare for restructuring

The buying and creative departments at Otto UK are being looked
at “with regards to restructuring and streamlining the
business”. A spokesperson confirmed that a 90-day
consultation period has begun with buyers and merchandisers as
the company considers whether to centralise purchasing in
Germany, where parent company Otto Group is based. A second phase
of consultations with other departments is scheduled for early
next year.

These consultations with employees and their representing unions
follow a strategic review of the business started by German
agency EMC2 in June to examine Otto’s UK home shopping brands,
which include Freemans, Grattan, Kaleidoscope and Oli. Prior to
that, Otto had been under internal review since February. The
internal review concluded that Otto’s Parcelnet delivery business
and the home shopping brands should be separated, but it ruled
out closing or downsizing the UK business. Otto subsequently
removed Parcelnet from the Otto UK business and integrated it
into the Germany-based international logistics unit.

Another overseas-based multititle brand, France’s Redcats, is
carrying out its own strategic review. Its La Redoute business
plans to eliminate 13 percent of its French workforce, or 670
jobs, during the next four years in order to “restore its
competitiveness”. The cutbacks reflect a move away from
traditional mail order and toward greater reliance on ecommerce.

Parent company PPR, the retail and luxury brands giant, recently
announced that third-quarter sales at Redcats fell 1.2 percent,
to €839 million (£684 million). On a comparable basis,
however, the decline was 5.5 percent. The web accounted for 49
percent of direct sales for the quarter. Redcats titles in the UK
include Daxon, La Redoute and Vertbaudet.

Published: 24th November 2008


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