Otto Group closes German returns-processing facility

Otto Group has announced the upcoming closure of the last returns-processing facility in Germany. The facility is operated by Otto subsidiary Hermes Fulfilment in Hamburg and will be closed down in the second half of next year.

The Otto Group says it had analyzed all possible alternatives and, after prolonged and exhaustive consideration, it had decided to stop process low-volume returns in Germany. The facility is no longer able to operate profitably, the ecommerce group explains.

Reasons that lead to the decision

Whereas speed is a major factor when it comes to parcel delivery, the key success factor in handling returns isn’t speed, but the costs of checking and, where required, reconditioning returned goods. And the returns processing market is very competitive.

“Further, the volume of returns is climbing in step with the rising revenues of the Otto Group retail companies. In consequence, this cost item is becoming more and more significant and has ultimately led to the recent planning decision”, Otto Group adds.

From Germany to Poland and the Czech Republic

For quite some time now, most returned goods within the Otto Group have been processed at its facilities in Poland and the Czech Republic. The returns processes so far in Hamburg will be handled at these locations in the future.

“This was an extremely tough decision for us to take. Nevertheless, particularly in these difficult times, we cannot postpone economic decisions that are vital for the future of our group of companies”, Kay Schiebur, Executive Board Member Services, Otto Group, emphasizes. The announced closure of the facility in 2021 should give the 840 mainly part-time employees enough time for occupational reorientation.

This was an extremely tough decision for us to take.