Zalando forecasts sales growth of 10% to 20% in 2020
Online fashion retailer Zalando expects to increase its full year gross merchandise volume by between 10% and 20%, despite a slowdown in sales during March due to the covid-19 lockdown.
It also expects to be “clearly profitable” with an adjusted EBIT of between €100 million and €200 million.
The growth is expected to be driven by an accelerated shift by consumers to online due to the pandemic, as well as growth in the retailer’s Partner Program. In the last three weeks, 50 new partners have joined the scheme including Vaude, American Eagle Outfitters, and Next Group brand Lipsy London.
Rubin Ritter, Zalando co-chief executive, 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.”
In the first quarter of 2020, Zalando saw its gross merchandise value climb by 13.9% to €2 billion and its revenue increase by 10.6% to €1.5 billion. Growth was especially strong in the offprice segment which grew its revenue by 35% year-on-year.
Due to a decline in customer demand in March following the introduction of the lockdown and an exceptional inventory write-down of €40 million as a result of the revised current season sales expectations, Zalando made an adjusted operating loss of €98.6 million in its first quarter. However, sales began to recover in April with gross merchandise value achieving double-digit growth compared to last year.
David Schröder, Zalando chief financial officer, said: “As a company, we quickly found answers to the challenges in March. We are now seeing a significantly more positive development in the first weeks of the second quarter. These recent developments are testament to the resilience of our business model and the agility of our team, and generally make us confident for the full year.”
