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AO to review its German business

AO World is to review its German business after it was impacted by a number of material changes to the local trading environment. In a trading… View Article

RETAIL TECHNOLOGY NEWS

AO to review its German business

AO World is to review its German business after it was impacted by a number of material changes to the local trading environment.

In a trading update, the online electricals retailer also said that its full year trading estimates remain in line with its forecast from November.  as it posted a 14% decline in third quarter group revenue.

This means that its group revenue was down 3% year-on-year in the nine months to 31 December following respective declines of 1% and 8% in the UK and Germany. In contrast, sales across the group were up 58% following growth of 58% and 67% respectively in the UK and Germany.

AO said its German business is being significantly impacted by increased competition in the country’s online market, a substantial uplift in digital marketing costs compared to pre-pandemic levels, and supply chain constraints. As a result, the company has decided to commence a strategic review of the business, which will evaluate a range of options.

Looking ahead, AO said: “We remain confident about AO’s long-term growth prospects, driven by the strength of our proven business model, the quality of our customer proposition, and the long-term market trend towards online migration.”

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