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.”
