Zalando expects substantial growth due to accelerated eCommerce shift

Zalando expects to achieve double-digit growth in 2020, despite the challenges posed by the Covid-19 crisis. The online fashion and lifestyle retailer aims to increase sales made by itself and partners using its site, called gross merchandise volume (GMV), by 10-20%, and increase revenue by a similar amount over this period.

The statement came as the brand reported a GMV increase of 13.9% to €2 billion and revenue growth of 10.6% to €1.5 billion in Q1 of 2020. It’s adjusted EBIT was -€98.6 million during this period, due to lower customer demand as lockdown restrictions were first put in place from mid-March. However, Zalando said that sales have since recovered in April, with year-on-year GMV growing by double digit figures. This is despite the general difficulties faced by online fashion retailers during Covid-19.

The fashion retailer wants to achieve an adjusted EBIT of between €100-200 million in 2020, and is planning to make investments in its business of between €230-280 million this year.

It believes growth will be primarily driven by the general shift to eCommerce, which has been accelerated by the Covid-19 crisis. Part of this will come from its partner program, which enables other retailers to sell via its eCommerce platform. This initiative has expanded significantly since lockdown measures were brought in, with more fashion brands moving their business online due to store closures. Zalando added that 50 new brands had joined the program in the last three weeks.

Rubin Ritter, co-CEO of Zalado 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.”

Zalado recently reported a 100% increase in items sold via its platform during this year’s Easter weekend.

Source: Essential Retail