The Mytoys headquarters in Berlin will close as well as 19 stores by February 2024, affecting around 800 employees in total.
Mytoys.de GmbH has announced that it will cease business operations and close all stores. The retailer forms a substantial percentage of the German toy market – some have estimated up to 10%, although this figure is unconfirmed.
The executive board and shareholders of the Otto Group have announced that the Mytoys brand will be offered on the Otto platform in future. A statement from the company reads: “In the highly competitive and low-margin toy market, the current multichannel concept is no longer viable. The decision means the closure of the Mytoys headquarters in Berlin as well a total of 19 stores by February 2024 at the latest. Around 800 employees of Mytoys.de GmbH will be affected by the closures.”
Company management is now looking to negotiate a reconciliation and social package in order to mitigate the consequences for employees.
Sebastian Klauke, executive board member for eCommerce, Technology, Business Intelligence and Corporate Ventures at Otto Group, said: “Of course, this decision was extremely difficult for us, especially in view of the dedicated and professional work of all of our Mytoys employees. However, after reviewing the business model – which has been making a loss for years – we had no other alternative. At the same time, we still believe in the Mytoys brand and want to offer the toys segment a new, attractive stage on otto.de.”
The decision to discontinue the business operations of Mytoys.de GmbH is the result of a thorough analysis of the company’s business development. For some years now – excluding the growth effects associated with Covid 19 measures undertaken during the pandemic – the company has failed to perform and has not achieved targeted levels of sustainable profitability despite multiple strategic realignments and considerable investments.
Management has concluded that any plans to effect significant change necessary for a turnaround are unlikely to succeed, with the required level of investment, increasing pressure from the market and rising costs making such endeavours unrealistic. It said the highly competitive, low-margin toy segment would be easier to manage profitably within Otto’s marketplace, with the corresponding diversification in the product ranges, than would be possible for a pure player like Mytoys.
Sebastian Klauke added: “The transformation of otto.de into a platform is moving along nicely. We intend to leverage the success of this marketplace model to exploit the growing but highly competitive toys segment in the future. We will be strengthening our product range in this area, making it even more attractive for our customers and showcasing the Mytoys brand.”
Founded in 1949 in Germany, the Otto Group is a globally operating eCommerce and service Group with around 43,000 employees, primarily present in Germany, the rest of Europe and the USA.
