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Zalando raises ambitions to host 10% of the European fashion market; H&M shows the impact of recent lockdowns on its sales

Image courtesy of Zalando

Zalando has its sights on adding more than 10% of the European fashion market to its platform, raising its ambitions after reporting 30% growth in its latest financial year. 

The fashion marketplace says it is now targeting €30bn in gross merchandise volume (GMV) by 2025, and in the longer-term aims to support sales equivalent to more than 10% of the total €450bn European fashion market.  

In 2020, it grew GMV to €10.7bn, 30.4% up on the same time last year, as it added new customers and expanded its partner programme. So far in 2021, it is on course to see GMV grow by about 50% in the first quarter – and is now targeting GMV growth of between 27% and 32%, to between €13.6bn and €14.1bn for this year.

Zalando co-chief executive Robert Gentz says: “2020 has been a year like no other. We have kept our eyes on our long-term vision to be the starting point for fashion. For the coming years, our focus remains on growth and investments for the long-term.”

During the last year, Zalando saw customer numbers grow by 25% to 38.7m. It now plans to expand to eight more European markets, including Croatia, Estonia and Latvia in 2021 and Hugnary and Romania in 2022. 

It also added 2,400 more stores to its platform by the end of 2020 through a connected retail strategy that brings together fashion brands, retailers and stores. By the end of February 2021, more than 3,400 stores were connected to its partner programme. 

It now plans to invest up to €400m in its logistics infrastructure and technology platform in the current year. 

Zalando co-chief executive David Schneider says: “The growth of Connected Retail underlines the value that the combination of offline and online can unlock for retailers.

“The industry has faced a lot of challenges in the past year, and we have seen partners engaging with Zalando more deeply than ever. We remain committed to be part of the solution and support our partners that are looking for ways to shift their business online.”

The marketplace says it is making good progress towards becoming more sustainable, having reduced its emissions since 64% since 2017 and now running its operations on 100% renewable energy. It says the sale of more sustainable products accounted for about 16% of GMV in 2021, up from about 7% in 2019. 

• Meanwhile, H&M this week says that although its online sales have grown quickly in the first quarter of its financial year, its net sales fell by 21% as its stores closed through Covid-19 lockdowns.

The fashion retailer says more than 1,800 of its stores were temporarily closed at the peak of restrictions during its first quarter, which ran from December 1 to February 28. At the same time, sales fell by 21% to SEK 40,060m. 

Since then, however, countries including its largest market, Germany, have started to allow retailers to reopen and by March 13 about 900 were still closed. Between March 1 and March 13, sales grew by 10% in local currencies compared to the same time last year. 

H&M is a Leading retailer in RXUK Top500 research, while both H&M and Zalando are profiled in the RetailX Fashion Sector report 2021.

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