Germany's Otto says currencies weigh on earnings - Handelsblatt

Reuters
Updated

FRANKFURT (Reuters) - Germany's Otto [OTTOG.UL], Europe's second-biggest e-commerce company, expects a "painful drop" in earnings for the 2014/15 fiscal year as the weak Russian rouble and euro weigh, its chief executive told the newspaper Handelsblatt.

The Otto Group, a mail order firm founded in 1949 which made the shift into e-commerce, will lose money in Russia in the fiscal year ending this month, Hans Otto-Schrader told Handelsblatt in an interview to be published on Monday.

Otto-Schrader said the group's results were also hit by the weak euro as it buys its textiles in dollars. "We think that we will not be able to pass on these higher purchase prices to our customers," he was quoted as saying.

Still, Otto-Schrader said, the privately held company does not plan to scale back investment.

Otto is targeting group sales of 8 billion euros (6 billion pounds) by 2015 and is investing 300 million euros in its online business to that end, including in new software for the OTTO website, mobile payments firm Yapital and other start-ups in e-commerce.

Otto is also facing stiff competition in its home market from Amazon and online fashion retailer Zalando.

(Reporting by Harro ten Wolde; Editing by Hugh Lawson)