(MENAFN) According to sources in the real estate market, Otto Group, one of the world's largest e-commerce companies, has completed the liquidation of all its assets in Russia. As reported by Kommersant newspaper on Friday, the German retailer sold its two warehouses located in the Tver region to a local warehouse operator called Multicold. Although the assets were estimated to be worth over $28 million, they were reportedly sold at a discounted price of approximately half their value. Multicold has confirmed the purchase and has already leased a portion of the storage space to the Russian e-commerce giant, Ozon.
Otto Group, primarily known for its mail order and online retail business, initially entered the Russian market in 1991. The company gained popularity by offering printed catalogs featuring clothing items from brands such as Bonprix, Quelle, Witt, and Otto. During the 1990s and 2000s, these catalogs enjoyed significant popularity among Russian consumers.
However, the Hamburg-based group began scaling back its operations in Russia in 2018. According to René Picard, CEO of Otto Group Russia, the decision was driven by the challenges posed by the wave of sanctions related to the Ukraine conflict that occurred between 2014 and 2015. In a January 2022 interview with Vedomosti, Picard explained that these sanctions complicated the company's operations and necessitated a restructuring of its business in Russia.
The sale of assets in Russia represents part of Otto Group's strategic realignment efforts. As the company streamlines its operations and adjusts to changing market conditions, it has made the decision to divest its Russian assets. The sale of warehouses in the Tver region to Multicold indicates a shift in focus for Otto Group, as it redirects its resources towards other markets or operational priorities.
While the liquidation of its assets in Russia marks a significant development, it does not signal a complete withdrawal from the country. Otto Group may continue to explore opportunities in the Russian market in alternative capacities or through partnerships. The move aligns with the company's broader strategic objectives and reflects its ongoing efforts to adapt and optimize its operations in response to evolving market dynamics.
In conclusion, Otto Group has finalized the liquidation of its assets in Russia, selling its warehouses in the Tver region to Multicold. The decision comes as part of the company's restructuring efforts and follows its scaling back of operations in Russia since 2018 due to challenges posed by sanctions related to the Ukraine conflict. While the sale signifies a shift in Otto Group's focus, it does not denote a complete withdrawal from the Russian market. The company may explore alternative avenues for engagement in the country as it continues to adapt and optimize its operations globally.
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