After just four years, the British white goods retailer AO is to discontinue its Dutch online shop. On the European mainland, the company wants to focus exclusively on Germany – and even that now seems uncertain.
Loss-making
AO announced the closure of the Dutch branch while presenting its half-year figures, stating the Dutch online shop makes an annual loss of six million euros. The British e-commerce company has earmarked three million euros for the exit from the Netherlands. The company will remain active in Germany for the time being and intends to work on profitability there, aiming to build a profitable company with a turnover of approximately 250 million euros.
However, the future of AO in Germany seems far from certain, as the following section in the annual results shows: “We continue to be totally committed to […] Germany and have real conviction that it will succeed. There are however a number of outcomes from the actions that we have taken that will not materialise 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 20 million pounds“(equivalent to 23 million euros).
AO launched in Germany at the end of 2014 and also built a distribution centre there. Later on, the company started to supply the Netherlands and Austria from the centre. During this period, CEO John Roberts also expressed their goal of conquering the rest of Europe. However, this aim now seems farther away than ever.
