Analysis: Has AO.com short circuited in Europe?
As AO.com revealed its plans to close its business in the Netherlands following disappointing half-year results in Europe, Retail Week speaks to chief executive John Roberts about how he plans to fix the “mistakes” made in Europe to get the business back on track.
The electrical retailer’s revenue in Europe fell 3.4% to €75.7m for the six months to September 30 as adjusted EBITDA losses widened to €15.9m during the same period.
Its operations in the Netherlands currently make a loss of €6m and Roberts admits AO does not have the “management bandwidth” to fix it over the next year or the £10m it would “burn through” to save it.
Roberts says his approach to the Netherlands business was a mistake. Rather than rolling out the same strategy from the UK, AO followed a trial-and-error process as it went along, which has ultimately backfired.
After handing over too much responsibility “too early” to local teams, Roberts had to make a “tough decision” and will be closing the business in the Netherlands to focus more on the much bigger – albeit also struggling – market in Germany.
Already have an account? Sign in here