DirectGroup Germany to Discontinue German-language Club Businesses by End of 2015
- Bertelsmann will close its club and direct marketing businesses in Germany, Austria and Switzerland by the end of 2015
- Business performance in structural decline, consolidation has been driven forward in recent years
- Negotiations between workers' council and management start; no changes at present for customers
Yesterday DirectGroup Germany decided to phase out its German-language Club and Direct Marketing businesses. The Bertelsmann subsidiary's businesses will close by the end of 2015 due to a lack of economic prospects, as the company draws the consequences from years of declining development at its book-club operations in Germany, Austria and Switzerland.
Fernando Carro, responsible for the Club and Direct Marketing businesses on Bertelsmann’s Group Management Committee, explains: "The decision to close our German-language club and Direct Marketing businesses was not easy. Despite extensive attempts to further develop the club model it is now clear that the club’s business model no longer has any viable economic prospects. The decreasing willingness of customers to enter into purchase commitments, which has been ongoing for many years now, has been exacerbated by the profound changes seen in book retail in recent years. Unfortunately, and despite the successful expansion of businesses in other areas and our colleagues’ many innovative concepts, this development could not be offset."
Christoph Mittendorf, CEO of DirectGroup Germany, adds: "In the months ahead, our focus will be on dealing with our staff and customers in a spirit of responsibility and partnership. We will enter into discussions with employee representatives right away, so that we can jointly develop a reconciliation of interests and a redundancy program as soon as possible."
Nothing will change for DirectGroup Germany customers for the time being: The company will continue to do business, and they will continue to receive catalogs and can place orders via catalog, website and phone as usual.
DirectGroup Germany has been systematically downsizing the company for several years now to reflect the declining volume of business. The closure of the club branches was announced in March 2014. In Germany there are currently still 52 branches and many hundreds of thousands of members.