Electrical goods etailer AO.com has taken the decision to close its German business after eight years of trading, following a strategic review into its performance.
The electricals specialist said it had âevaluated a range of strategic options during the review processâ, which began in January, but had decided that the closure of the German business was the best course of action.
The review found that its German division had been affected by âan intensifying competitive landscape as customers have returned to pre-pandemic levels of online shopping, a substantial increase in digital marketing costs and a constrained supply chainâ.
As a result, AO said it had taken the decision based on âthe continuing deterioration in the outlook for the German businessâ, as well as the âboardâs responsibilities to shareholders and other stakeholdersâ.
The retailerâs German arm accounts for around 10% of the groupâs total revenue and will be shuttered at a cash cost of between nil and ÂŁ15m.
The business will continue to trade for a brief period to facilitate a structured and orderly closure for its customers, suppliers and employees.
AO thanked its German staff for their âhard work and dedicationâ since the business was launched in 2014.
AO said it will now focus on the UK market and on optimising the groupâs profit and cash generation. Being mindful of the ongoing cost-of-living crisis, it said the business was confident it would trade in line with FY 2023 expectations and would make further strategic announcements at its full-year results presentation.
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