AO closes its Netherlands operation
UK online electricals retailer AO announced today that it will close its Netherlands operation. The exit from the Netherlands enables the retailer to focus more on its German business, soon the only operation outside of the United Kingdom.
In February 2016, AO opened its digital doors in the Netherlands. But now, after four years, the UK retailer is already leaving this country. The company announced the closure of its Netherlands operation in its half-year report this morning. Closing this operation will cost about 3 million euros. This adds to the 6 million euros per year it currently loses in the Netherlands.
‘Building German operation that will be profitable’
Leaving the Netherlands enables AO to concentrate on the transformation of its German business, on it still believes in. ” Notwithstanding our decision to close the Netherlands, we remain fully committed to the scale of the opportunity, the model and strategy in our German business. We remain committed to building German operations that will be a profitable business at around 250 million euros run rate of revenue.”
AO not sure about Germany either?
Although the electricals retailer from the United Kingdom will now focus fully on Germany, it still isn’t sure things will work out great there. “We have real conviction that it will succeed. There are however a number of outcomes from the actions that we have taken that will not materialize until early 2020; if we are wrong in our conviction it will be clear to us by at the very latest summer 2020 and in a worst case scenario we believe the cost of closure is about 23 million euros.”