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Richest Germans: The Mail-Order King

DW staff (dre)December 4, 2005

Michael Otto heads Germany's second-richest family. But he hasn't let that get to his head. He took his father's successful mail-order business and turned it into a global player.

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Checking out the latest offerings in the Otto catalogueImage: dpa

Supermodels Heidi Klum and Claudia Schiffer have graced his famous mail-order catalogue -- the shiny, ultra-successful symbol of Michael Otto's company.

But it's his quiet, strategic investments in everything from US homeware chains to tech companies that have transformed his father's eponymous company into a worldwide player. Otto is the world's biggest mail-order business, with sales of $17.5 billion (14.9 billion euros) in the last fiscal year. The man himself is worth $8.3 billion, according to Forbes magazine.

Their online business is second only to Amazon.com, with sales of 2.8 billion euros the first half of this year, an increase over the same period last year.


Michael Otto
Supermodels regularly grace the covers of his cataloguesImage: dpa

"The increase will continue for the rest of the year," Otto said at a press conference at the end of October.

WWII origins

Not bad for a company that began business in the country's darkest years. When Otto was a boy, father Werner Otto took the whole family and fled westwards from their home in East Prussia, joining the tens of thousands of German expellees at the end of WWII.

His father first built up a shoe factory enjoying success in the mail-order business. The first catalogue in 1950 was a humbled 14 pages featuring 28 pairs of shoes.

"He may not have known it then, but he created what became Germany's biggest mail order business," said Wolfgang Ischinger, Germany's ambassador to the United States, at a recent dinner honoring Michael Otto.

By the time Michael Otto took over in 1981, the company boasted 5.5 million deutsche marks ($3.2 million) in sales.

Global expansion

Michael Otto
Usually Otto has people helping him put together customer ordersImage: dpa

Michael Otto, who had also begun building up a real estate empire, launched his company's venture into the American market. In 1981, he bought up 80 percent of Spiegel Inc, the fourth-largest mail-order business in the US that included Eddie Bauer. Over the next decade he continued to expand his channels of distribution, buying majority shares in companies from Italy to the Far East.

In 1998 he added the American home furnishings company Crate & Barrel to his company's roster. In the near future, Otto plans to bring Crate & Barrel, of which his company owns 79 percent, over to Germany and Britain.

Team player

Most of his major decisions are reached after team consultation. Otto prefers to mix it up with his employees, playing volleyball with them almost every Monday night and giving time to the work groups charged with thinking up new strategies.

When he takes vacation, it's often for weeks at a time -- the way he delegates authority allows it. It also gives him more time for his social engagements. He's a passionate art collector as well a strident environmentalist. His company is eco-friendly, managing to cut its CO2 consumption by 45 percent.

His social engagement extends to the firm's 55,000 employees.

"I think that a manager doesn't shine as a result of how many people he fires, but how many he hires," he said.

It's the kind of line sure to endear him not only to Germany's troubled political elite, but the rest of the country as well.