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Zalando gives update on covid-19 measures and first quarter results

Online fashion retailer Zalando has given an update on the range of new initiatives it has introduced to support fashion brands and retailers in its partner… View Article

FASHION

Zalando gives update on covid-19 measures and first quarter results

Online fashion retailer Zalando has given an update on the range of new initiatives it has introduced to support fashion brands and retailers in its partner programme throughout the coronavirus crisis.

Partners in need of immediate cash relief will benefit from faster pay-out terms until the end of June. In addition, partners in its Connected Retail programme will be able to sell via the platform without paying commission fees until the end of May.

Zalando has also been improving visibility for small to midsize partners in its shop. The company said this resulted in its partners doubling their sales to more than one million items over the easter weekend.

Zalando co-chief executive Rubin Ritter said: “Over the past weeks, we have taken decisive action to protect our employees and our company from the impact of the coronavirus. Going forward, we will focus our efforts and our investments on accelerating our platform strategy throughout this crisis. For the fashion industry, the time to go online is now, and we can make a difference by supporting our partners to grow their business on our platform.”

Future plans include expanding the company’s offering to include textile face masks in the coming weeks.  All profits generated from the sales will be donated to charity. In addition, Zalando has launched its first ever remotely produced marketing campaign to encourage customers to stay active at home as it looks to benefit from increased sales of activewear.

Zalando has also revealed that its gross merchandise volume declined by 8% year-on-year in the three weeks following 9 March but has now returned to growth.

According to its preliminary first quarter figures, the company’s  gross merchandise volume grew by between 13.1% and 14.3% to €1.98 to €2.00 billion in the period. Meanwhile, group revenues climbed by 10.1% to 11.6% to €1.52 to €1.54 billion. Zalando expects its adjusted EBIT to be in the range of minus €90 million to minus €110 million due the lower sales growth and an exceptional inventory write-down of €40 million as a result of revised sales expectations for the current season.

Zalando chief financial officer David Schröder said:  “We look back at a challenging quarter. Nevertheless, we have managed to grow our business, and the first weeks of April make us optimistic for the second quarter. We have initiated the right response in order to safeguard the financial success of our business in challenging times and continue to build our strong position in the market.”

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