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Uncertainty remains: Zalando has a good financial year despite the corona virus

2020-02-27T14:16:45.358Z

ZEIT ONLINE | News, backgrounds and debates



Berlin (dpa) - The rapidly spreading corona virus also employs well-known online retailers. "So far, we have had no material effect on our business," said the head of the fashion platform Zalando, Rubin Ritter, in Berlin.

"But the situation could develop very dynamically in the coming weeks, that's something we have to reckon with." All goods for the summer are already in the stores. It remains to be seen whether the novel corona virus (Sars-CoV-2) will have an impact on consumer demand.

The pathogen thus creates uncertainty when looking at the future plans of those responsible. After a satisfactory business year, Zalando plans to position itself significantly stronger in two segments: in the luxury fashion business and in second-hand clothing.

"We're a pretty big company," said Ritter. "But we are still small compared to the opportunities ahead." Zalando currently estimates the global fashion market as a whole at around 450 billion euros. Around a quarter of these are implemented online. Zalando plans to expand its market share to five percent in the coming years. "That shows how much growth is still possible," said Ritter.

No segment online is currently growing as strongly as luxury brands. Zalando plans to double its premium range by 2023. "The premium category has grown fastest in recent months and we see great potential to build on it," said Zalando co-chair David Schneider. Zalando primarily targets younger customers. "The company has recently started selling brands such as Moschino Couture and Alberta Ferretti," it said. Further offers are to follow.

In addition, the business with sustainable and second-hand clothing is to be expanded. Already customers can use an app to take photos of their used clothing and sell it to Zalando. From autumn this option will also be opened to all other customers via the Zalando platform. However, the company does not pay money, but issues vouchers.

In the past financial year, Zalando increased sales by a good 20 percent to 6.5 billion euros. Gross goods volume, which includes total customer expenditure for both Zalando goods and those from the partner program with other retailers, rose by almost 24 percent to 8.2 billion euros.

The bottom line, Zalando earned almost 99 million euros, almost twice as much as in the previous year. Zalando grew significantly, particularly in the final quarter, which also includes the Christmas business. The company expects further sales growth in the current year. However, the forecast does not include possible negative effects from the corona virus.

However, other construction sites remain: the number of orders per customer was 4.7, 6.5 percent above the level of the previous year. At the same time, the average shopping basket size decreased slightly to 56.6 euros. More orders cost more. The company is therefore interested in larger shopping carts and fewer individual orders. "We have therefore introduced minimum order values ​​in 9 of our 17 stores," said Ritter. Germany is not among them.

The stock exchange reacted cautiously to the solid numbers. Zalando's papers recently dropped by 7 percent to EUR 41.73, bringing up the rear in the weak MDax of medium-sized stocks. In the meantime, the share certificates had dropped by more than 9 percent, the lowest level since the beginning of December. The main reason for this may be the company's subdued outlook from the dealers' perspective.

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Source: zeit

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