Zalando anticipates FY sales growth of 10% to 20%
Online fashion retailer Zalando has revealed it is expecting an increase in its full year gross merchandise (GMV) volume by between 10% and 20%, despite a slowdown in sales in March due to the Covid-19 pandemic.
The online retailer expects to continue to “grow profitably” and therefore anticipates an adjusted EBIT between €100m (£87.3m) and €200m (£174.6m) for the fiscal year 2020 compared with €224.9m (£196.4) in 2019.
The growth is expected to be driven by the “accelerated consumer shift” from offline to online due to the Covid-19 lockdown, alongside a growth in Zalando’s ‘Partner Programme’, with over 50 new partners joining the scheme, which includes brands such as Vaude, American Eagle Outfitters, and Next Group brand Lipsy London.
Rubin Ritter, co-CEO said: “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.”
In its first quarter, Zalando reported a 13.9% increase in GMV to €2bn (£1.75bn) as its venues increased by 10.6% to €1.5bn (£1.31bn). The retailer also said growth was “especially pronounced” in the offprice segment, which grew its revenue by 35% year-over-year.
Due to lower customer demand in March following the lockdown measures and an exceptional inventory write-down of €40m (£34.9m) as a result of the revised sales expectations for the current season, Zalando reported a loss of €98.6m (£86.1m) in adjusted EBIT in the first quarter.
However, sales in April increased due to customer demand starting to recover and Zalando reported GMV grew double-digit compared with 2019 figures.
CFO David Schröder added: “As a company, we quickly found answers to the challenges in March. We are now seeing a significantly more positive development in the first weeks of the second quarter.
“These recent developments are testament to the resilience of our business model and the agility of our team, and generally make us confident for the full year.”
