Otto Versand:From the shoe retailer in Hamburg to the online group

The Otto family business is one of the largest mail order companies in the world - now largely in the online business. It all started very small - in a barracks in Hamburg in 1949.

by Beatrix Hasse

The right idea at the right time:On August 17, 1949, entrepreneur Werner Otto started his mail order business in a small barracks in Hamburg-Schnelsen with a capital of 6,000 DM. It is the birth of Otto-Versand. At that time only four employees worked for the entrepreneur. A year later, the first 16-page, hand-bound catalog was published with a print run of just 300 copies.

Otto initially only delivers the left shoe

The principle - convenient ordering from home - is new, the range is still very clear:the mail order company offers 28 pairs of shoes. After placing an order, customers will receive the left shoe first. If they decide to buy, the second one will be delivered later. Payment is made by invoice instead of cash on delivery - an innovation. The small company hits the nerve of the time in post-war Germany at the beginning of the economic miracle. The "California" women's shoe in particular soon became a bestseller.

Otto goes from being a shoe manufacturer to a mail order company

The entrepreneur has just gone bankrupt with his own shoe production. In 1948, Werner Otto, who came from the Mark Brandenburg, came to Hamburg with his family as a refugee. Without knowing anything about shoes, he opens a company. In the post-war period, when shoes are urgently needed, he rips off his "cucumbers," as he calls the simple models. But with the introduction of the D-Mark and an improvement in the supply situation, shoes are no longer in short supply and Otto has to give up production.

Become a trendsetter with the navy folding trousers

Instead, Werner Otto is now concentrating on mail order. He orders the shoes from other manufacturers. Shortly thereafter, the trained businessman expanded his range of goods to include textiles, which were first offered in the 1951 catalogue. The navy folding trousers are particularly popular with customers:Otto-Versand sets new trends in the fashion world. From there it's only uphill. In 1953 Werner Otto already employed 150 people and had a turnover of five million DM. Two years later, the annual turnover is a whopping 28 million DM. Customers appreciate the quality of the goods on offer, leaf through the increasingly professionally produced catalogs and take advantage of innovative offers such as collective orders with a five percent discount. The company grows and grows, asserting itself against the competition. After a stopover in the Hamm district of Hamburg, Otto-Versand finally moved in 1960:the building in Bramfeld is still the headquarters today.

The growth years of Otto Versand

In just ten years, Werner Otto managed to become one of the leading German mail order companies:with 1,000 employees and more than 100 million DM in sales. In the early 1960s, Otto sent 10,000 packages a day.

There were call centers from 1963, and customers can now conveniently order by telephone. In the period from 1965 to 1967, the company is even able to double its turnover - and that's only through the expansion of the business.

Hermes:Own parcel service ensures further breakthrough

The heavy workload and stressful life is taking its toll. In 1966 Otto suffered a heart attack. He hands over the management of the company to Günter Nawrath. The head of the company retires from day-to-day business and takes over the chairmanship of the supervisory board. The company continues to do well; by the early 1970s, Otto had 5,000 permanent employees. In 1972 there was another breakthrough:Hermes was added, Otto's own parcel service delivered directly to the house.

Proud of the kids

With his first wife Eva, Werner Otto had a daughter Ingvild in 1941 and a son Michael two years later. Werner Otto married for the second time in 1952:his wife Jutta gave birth to their son Frank in 1957. Werner Otto entered into his third marriage at the age of 54, to Maren, who was 30 years his junior, and became a father again:to son Alexander and daughter Katharina. Werner Otto once said that his five children were his greatest achievement in life. Today, this next generation of the Otto dynasty is in charge of the company.

The second Otto generation

In 1971 his son Michael Otto joined the company:at just 28 years old, the son of Werner Otto's first marriage became Germany's youngest board member. In order to be independent of his father's company, he insists on going his own way after graduating from high school. After studying economics, Michael worked in Munich as a self-employed real estate agent before joining his father's company. In 1981 he became chairman of the board there, in 2007 he retired from the post and is now the owner and chairman of the supervisory board.

He's not the only son involved in the family business. In 2001, Alexander Otto, born in 1967, took over the real estate group ECE, founded by his father in 1965 and specializing in the management of shopping centers. Its best-known objects include the promenades in Leipzig's main train station and the Potsdamer Platz arcades in Berlin, as well as the Alstertal shopping center in Hamburg.

The daughters of the house turned to the arts:Ingvild worked as a gallery owner for years and later opened her own museum. Katharina has made a name for herself as a film producer over the years. Son Frank also becomes an entrepreneur - albeit in the media business - owns record labels, is involved in various private radio and television stations and realizes art projects.

Otto Versand:Success with flexibility

There are always ups and downs in the company's history. But the sense of achievement outweighs it. Over the years, company founder Werner Otto repeatedly tried out new things, opening around five department stores in the 1970s. When these do not prove to be profitable, he quickly rents them out to Horten AG. Even his attempt to run a chain of car washes does not yield the expected return, so Otto sells it.

According to the entrepreneurial principle "divide and grow", Werner Otto keeps raising new capital so that his company can expand. He always retains the entrepreneurial leadership, but takes on partners. Since the repurchase of all shares on December 31, 2007, the group has once again belonged completely to the founding family.

In view:environmental protection and sustainability

In the 1980s, junior company boss Michael Otto focused more and more on environmental protection and sustainable goods - and thus took on a pioneering role early on:As early as 1986 he declared environmental protection to be an official corporate goal. Garbage is separated, furs and harmful paints are banned from the program. From 1990 there were textiles on offer that had been tested for harmful substances, which five years later were even marked with the seal of quality "skin-friendly because they have been tested for harmful substances" and thus meet the Öko-Tex 100 standard. From 1997, ecologically produced cotton has played a major role at Otto. The company tries to save energy by switching from air to ship transport for goods transport.

Otto.de:Online trading ushers in a new era

After the 24-hour order service was introduced in 1991, a completely new era began in 1995. Otto relies on the Internet and quickly introduces online trading, launching otto.de. This makes the company once again a pioneer in its industry.

While Otto's online business is growing steadily, one of its biggest competitors is missing out on the trend:the mail order company Quelle. The Bavarian family company gets into financial turmoil, is taken over by the Karstadt group and has to file for bankruptcy in 2009. Otto buys the brand name Quelle for a double-digit million amount. In 2011, under the auspices of the Hamburg-based company, a marketplace for online retailers from the technology and household sectors was created on the quelle.de website.

Otto catalog will be discontinued in 2018

Otto is increasingly generating its sales via otto.de and other online shops. According to the company, 97 percent of customers ordered online in 2018. Only three percent still use fax, letter, telephone or order cards to order goods from Otto. This is not without consequence:in November 2018 the last Otto catalog will go to press. "Our customers have abolished the catalog themselves because they use it less and less and have long been accessing our digital offers," summarizes Marc Opelt, head of the individual company Otto, the former Otto mail-order company. Otto is now a subsidiary of the Otto Group.

Otto successful in Germany and internationally

The Otto Group now operates globally and has a broad base. According to its own statements, it maintains around 30 groups of companies in more than 30 countries and employs around 50,000 people. The focus of the business is on fashion and lifestyle products. The group was able to post sales of 15.6 billion euros in the 2020/2021 financial year - an increase of 9.7 percent compared to the previous year, which, in addition to the business strategy, is probably also due to the Corona crisis.

Within Germany, the mail-order companies Baur, Heine, About You and Bon Brix belong to the company, as does the chain store Manufactum, to name just a few. However, financial and other services are now also part of the group's portfolio.

So it shouldn't come as a surprise that the Otto family has been one of the richest in Germany for years. The family supports art, sports and charitable projects. Heraclitus' "Panta rhei" ("everything flows"), Werner Otto's life motto, helped him through turbulent times. His courage to try something new and his enormous flexibility have shaped the company. Last but not least, his success can also be attributed to the great team spirit within the entrepreneurial family. Werner Otto died in Berlin on December 21, 2011 at the age of 102.