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Zalando says it will continue to invest for growth as sales rise

Zalando said that it was continuing to invest for future growth, as it said half-year revenues looked likely to be up by more than 20%.

The Berlin-based fashion retailer and marketplace said in a trading update that early figures suggested revenues would reach between €2.07bn and £2.08bn in the first half of its financial year, representing growth of between 21% and 22%. Earnings before interest and tax are expected to reach between €100m and €106m, staying flat on last year’s €101m and representing a profit margin of between 4.8% and 5.1%.

Zalando said that growing sales came through investments in areas such as its membership programme Zalando Zet, which offers customised services including same-day delivery, pick-up of returns, personal fashion advice and early access to sales. The first phase will see customers in Berlin, Leipzig, Frankfurt and Hannover test the service for free for three months before paying €19 a year to join.

Co-chief executive Rubin Ritter said: “We are pleased with the performance in the first half of 2017 and continue to invest in order to meet our ambitious growth targets for the full year and beyond. In the fast-growing online segment, we continue to outperform the market and deliver on our 20-25% growth corridor. Our investments, for example in our fulfillment capabilities and the launch of our membership program Zalando Zet, are the cornerstones for future growth.”

Zalando, a Top50 retailer in IREU Top500 research, says its Zet programme is an example of a customer promise that already includes free delivery and returns within 100 days.

The retailer sells 2,000 different international and local brands as well as offering its own private label products. It serves 15 European markets, including the UK, through localised country websites and four centrally located fulfillment centers in Germany, supported by warehouses in Northern Italy and France. Together Zalando’s shops attract over 200 million visits per month and in the first quarter of 2017, more than 68% of traffic came from mobile devices, and it had 20.4m active customers by the end of the quarter.

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