Otrium on the path to profitability

Online outlet platform Otrium is nearing its eight-year anniversary and is already looking at the prospect of profitability. The company has been focusing intensively on this goal since 2023 and was able to reach the break-even point in the fourth quarter of 2024. “We are aiming to break even all year round in 2025,” explains CEO Frank van Valderen in a video call with FashionUnited.

Otrium was founded by Max Klijnstra and Milan Daniels with the aim of ensuring that garments produced are actually worn. Therefore, Otrium helps brands sell their inventory at discounts through the platform, taking care of the entire process. Otrium operates primarily on a consignment model (98 percent of supply), where brands hand over the garments to Otrium but retain ownership. These items are stored in a warehouse in Almelo, from where Otrium ships and fulfills orders throughout Europe. The platform offers a wide range of brands, but is very selective with this selection.

Brands that are considered “not relevant” or not profitable have been removed from the range. But what does “not relevant” mean? “We had brands whose products were sold in the store for 30 to 40 euros,” explains Van Valderen. “If we then offer a 70 percent discount on them, we will sell them for just ten euros. We receive a commission for these ten euros, but this cannot cover the costs.” He adds: “These brands were often products that customers were dissatisfied with and which they returned. This led neither to customer loyalty nor to a good margin for the brands and us.”

In 2024, many well-known brands were added to the Otrium range, including Closed, McGregor, New Balance and Levi’s. “More exciting brands will be added in 2025,” says van Valderen proudly. “These are brands that we know our customers like to buy.” These attractive brands have also increased the number of items per order, says the CEO.

“This means that the order economics have improved.” In addition, the offer has been further personalized so that visitors are shown products that are based on their previous purchasing behavior. “Thanks to the personalized offers, we also have fewer returns.”

2024 for Otrium: B Corp, break-even and new brands

However, the path to profitability involves not only improving offerings, but also careful cost control. This means that the packaging boxes are better made to measure, which leads to a reduction in material consumption and at the same time more packages can be transported at the same time. An important step was the withdrawal from the USA and the closure of the branch in Great Britain. “We were in the black for one month in 2023 and a whole quarter in 2024. In 2025 we will be very close to a full year,” explains van Valderen.

The fourth quarter of 2024 not only brought break-even, but also the B Corp certificate. Otrium achieved a score of 91.6 (at least 80 points are required for certification). “Our business model aims to solve an economic and social problem: clothing that is not worn.” This solution is seen as a contribution to sustainability. “The business model is positive. We want to help our customers make sustainable decisions if they wish. Therefore, the decision to pursue B Corp was obvious. It is an award and recognition, but also a step towards further development.”

“There were no surprises in the B Corp evaluation process. However, the questions have brought to light some topics that we previously knew little about. For example, the question of equal pay for men and women, which we were able to confirm,” reports van Valderen. Above all, Otrium received confirmation that the company is on the right path and that this path must be consistently continued. The personalization of offers was also further advanced. “Of course we were already implementing that. What I’m trying to say is that B Corp is a part of our journey.”

To further pursue its sustainability goals, Otrium has also introduced a repair and recycling service. Otrium has products that are returned with minor damage repaired in collaboration with partners. After repair, the items will be offered for sale again. If a product is no longer repairable, Otrium offers partner brands various options: they can sell the items to a reseller or receive them back to breathe new life into the products themselves. Alternatively, brands can also choose to have the items recycled.

Looking into the future, van Valderen believes that new goals will continue to emerge for the company. “Five years from now everyone will still be wearing clothes and there will still be excess inventory. I wish that wasn’t the case, but that’s the way it is.” Van Valderen therefore takes a pragmatic approach: “In five years we would like to have even more great brands and more loyal, satisfied customers. That would mean we did everything right. In five years we will still be working towards this dream.”