Germany's Otto witnesses rise in online sales

Otto, Germany's one of the biggest e-commerce companies has witnessed comparable sales rose 5 percent in its FY16-17. The increased sales are driven by online furniture and fashion and strong growth at its Hermes logistics arm in Britain.

Headline sales rose 3.4 percent to 12.5 billion euros ($13.6 billion) in 2016-17, but increased by 5 percent on a comparable basis after stripping out the impact of disposals, including French e-commerce firm 3SI.

Many big furniture chains were slow to embrace e-commerce, put off by the cost of delivering bulky goods and concerned whether shoppers would be prepared to make expensive purchases without seeing them in person.

But online furniture sales are now undergoing through a growth phase, prompting Swedish budget retailer IKEA to invest in online shopping and experiment with pick-up points and smaller shops.

The Otto Group stated, "Online sales rose 10 percent to 7 billion euros in the fiscal year to Feb. 29."

Otto's logistics business Hermes, which competes with players like Deutsche Post and Royal Mail, saw turnover rise 5 percent to 1.57 billion euros, but increase by more than 11 percent taking into account the impact of a weaker sterling after Britain voted to leave the European Union.

Otto's biggest business, the OTTO site in Germany, saw sales rise 6 percent to 2.72 billion euros, helped by sales of furniture. Otto's U.S. home furnishings site Crate and Barrel saw sales rise 10.7 percent to 1.48 billion after it overhauled ranges under new management.