Zalando adds initiatives to support fashion brands despite Q1 loss

Zalando has revealed a series of new initiatives to help support its fashion brands during the current coronavirus pandemic, despite it expecting to post a first quarter loss.

In a trading update for the first three months of the year, the company said it expects an adjusted EBIT in a range of -€90m to -€110m (-£78m to -£96m) which it said is a result of “lower sales growth in the first quarter and an exceptional inventory write-down” of €40m due to revised sale expectations.

Zalando also reported that gross merchandise value increased in the range of 13.1%-14.3% to €1.98bn-€2bn (£1.62bn to £1.74bn). It also expects group revenues to have increased by 10.1%-11.6% to €1.52bn-€1.54bn (£1.33bn-£1.34bn).

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In order to support fashion brands Zalando announced it will offer “immediate support” to its brand partners in the Partner Program by allowing them to “connect more easily” with the Zalando platform.

Until the end of June, it said partners in need of immediate cash relief benefit from faster pay-out terms and it will further improve the visibility for small to midsize partners in its shop.

The company has also initiated further measures for brick-and-mortar retailers to uphold parts of their business during the lockdowns. Until May 31, partners in the Connected Retail program will be able to sell via the platform without paying commission fees.

Zalando co-CEO Rubin Ritter said: “Over the past weeks, we have taken decisive action to protect our employees and our company from the impact of the coronavirus. Going forward, we will focus our efforts and our investments on accelerating our platform strategy throughout this crisis.

“For the fashion industry, the time to go online is now, and we can make a difference by supporting our partners to grow their business on our platform.”

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