March 28, 2017 / 8:31 AM / 4 months ago

Germany's Otto sees strong online sales of furniture

2 Min Read

BERLIN (Reuters) - Otto, Germany's second-biggest e-commerce company after Amazon (AMZN.O), reported comparable sales rose 5 percent in its 2016/17 fiscal year, driven by online furniture and fashion and strong growth at its Hermes logistics arm in Britain.

Headline sales rose 3.4 percent to 12.5 billion euros ($13.6 billion) in 2016/17, but increased by 5 percent on a comparable basis after stripping out the impact of disposals, including French e-commerce firm 3SI.

Many big furniture chains were slow to embrace e-commerce, put off by the cost of delivering bulky goods and concerned whether shoppers would be prepared to make expensive purchases without seeing them in person.

But online furniture sales are now growing quickly, prompting Swedish budget retailer IKEA to invest in online shopping and experiment with pick-up points and smaller shops.

The Otto Group, a family-owned mail order firm founded in 1949 which shifted into e-commerce and now runs more than 100 webshops worldwide, said in a statement on Tuesday its online sales rose 10 percent to 7 billion euros in the fiscal year to Feb. 29.

Otto's logistics business Hermes, which competes with players like Deutsche Post (DPWGn.DE) and Royal Mail (RMG.L), saw turnover rise 5 percent to 1.57 billion euros, but increase by more than 11 percent taking into account the impact of a weaker sterling after Britain voted to leave the European Union.

Otto's biggest business, the OTTO site in Germany, saw sales rise 6 percent to 2.72 billion euros, helped by sales of furniture. Otto's U.S. home furnishings site Crate and Barrel saw sales rise 10.7 percent to 1.48 billion after it overhauled ranges under new management.

($1 = 0.9211 euros)

Reporting by Emma Thomasson; Editing by Maria Sheahan and Mark Potter

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