Zalando has attributed its “improved profitability” and rising revenues to a “rising demand” for its online shopping club, Lounge by Zalando.
In its first quarter, the online fashion retailer reported a 2.3% rise in group revenue year-on-year to €2.25 billion (£1.98 billion). It also posted a 2.8% increase in gross merchandise volume to €3.2 billion (£2.81 billion).
According to Zalando, the rise in profits was due to an increased demand for its online shopping club, alongside partners selling more “amid a continued challenging economic environment with high inflation.”
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Lounge by Zalando, contributed to a 33% rise in revenues at Offprice, offering customers limited-time discounts on premium brands.
The enhanced on-site customer experience and new brand identity introduced in January drew positive reactions from users interacting with the Lounge by its app.
The company also saw an increase to the number of active customers increasing by 4.8% year-on-year to a total of 51.2 million.
“The first quarter demonstrated how flexible our business model is, enabling us to perform in a challenging market environment as we saw strong customer demand at our Offprice segment and a strong performance of the partner business,” Zalando co-CEO Robert Gentz said.
“Curated product drops with brands such as Adidas and Salomon, or teaming up with designer brands to create capsule collections, led to increased engagement with our customers. These exclusive and limited-edition products keep our customers coming back more regularly.”
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