Zalando anticipates double-digit business growth in 2020

Despite the challenging trading environment due to the coronavirus, Zalando aims to grow its GMV by 10-20 percent, and its revenue in the same range but below GMV due to the fast growth of the platform business. The company expects to be clearly profitable with an adjusted EBIT between 100 million and 200 million euros and plans investments between 230 and 280 million euros.

“We are confident that we will grow double-digit and at a clear profit in 2020. This will allow our partners to grow and gain market share in a challenging economic environment by building their business on Zalando. Many of them have significantly increased their activities on our platform in the past weeks, and we will continue to make it easier for them to reach customers across Europe,” said Rubin Ritter, co-CEO of the company in a statement.

Offline to online shift expected to boost Zalando’s GMV and sales

The company said, Growth will be driven by the accelerated consumer shift from offline to online, and Zalando’s ability to invest independent of demand fluctuations and a challenging environment, as well as its accelerated platform transition. The Partner Program share of GMV grew 4.4 percentage points year-over-year in the first quarter. In the past three weeks, the company added, 50 new partners joined the Partner Program, among them Vaude, American Eagle Outfitters, and Next Group brand Lipsy London.

In the first quarter of 2020, Zalando grew its GMV by 13.9 percent to 2 billion euros (2.16 billion dollars) and its revenue by 10.6 percent to 1.5 billion euros (16.1 billion dollars). The company said that frowth was especially pronounced in the offprice segment, which grew its revenue by 35 percent year-over-year. Due to lower customer demand in March following the lockdown measures and an exceptional inventory write-down of 40 million euros as a result of the revised sales expectations for the current season, Zalando recorded an adjusted EBIT of minus 98.6 million euros (106.4 million dollars) or a margin of minus 6.5 percent. In April, Zalando saw customer demand recover and GMV grew double-digit compared to last year.

The number of active customers grew by 17 percent to 32 million, who the company said, on average ordered 4.7 times with Zalando over the last 12 months. Also, the number of new customers increased by 39 percent.

Additionally, Zalando saw more customers shopping for more sustainable fashion. In March, around 30 percent of customers bought more sustainable fashion. More sustainable fashion makes up around 10 percent of Zalando’s GMV, bringing the company closer to its goal of growing this share to 20 percent by 2023.

Picture:Zalando newsroom