Dusseldorf More than 48 million customers ordered from fashion retailer Zalando last year, ten million more than a year earlier. Europe’s largest online fashion retailer therefore achieved sales in the double-digit billion range for the first time. Thanks in part to new markets, sales rose by almost 30 percent to 10.4 billion euros. The Berlin group, which has been listed in the Dax 40 since autumn, announced this on Tuesday. The figures are at the upper end of expectations.
However, Zalando’s rapid growth rate will slow down in 2022. Already in the fourth quarter, sales growth was 9.1 percentage points lower than in the previous year.
Investors were disappointed. The share price fell on Monday by more than nine percent to less than 54 euros. As early as 2021, Zalando was one of the weakest German standard values. After the record high of 105 euros in July, the price went steadily down. The stock is already very volatile and is now back to the pre-corona level.
As an online mail order company, Zalando benefited greatly from the restrictions imposed on stationary retail during the pandemic. Competitors such as About You from Hamburg or Asos and Boohoo from Great Britain are also among the Corona winners.
Top jobs of the day
Find the best jobs now and
be notified by email.
“Since the summer we have seen a normalization of demand. We expect this to continue this year,” said David Schröder, the previous Chief Financial Officer, who has been responsible for operational business since March. For the current year, Zalando expects sales to grow by 12 to 19 percent to a maximum of EUR 12.3 billion.
The forecast does not yet include the effects of the war in Ukraine – for example on supply chains, inflation and consumer climate. “We see a few uncertainties – not least because of the war in Ukraine,” said Schröder. “For our customers in Central and Eastern Europe, other things are more important than shopping for fashion.” Zalando is not active in Russia and the Ukraine.
>> Read also: About You: Offensive in software development to give the share new impetus
Zalando met expectations in 2021. Adjusted operating profit (EBIT) rose by eleven percent in 2021 to EUR 468.4 million. A value of 435 to 475 million euros was expected. For 2022, Zalando is promising a wide range of between 430 and 510 million euros.
Profitability, on the other hand, declined slightly. The adjusted EBIT margin fell from 5.3 to 4.5 percent in 2021. A margin of between 3.7 and 4.1 percent is expected for 2022. The average shopping cart shrank slightly by 1.3 percent, although customers ordered 5.2 times more often than ever before.
Zalando has high hopes for the platform business. Fashion manufacturers, other retailers or stationary shops can sell their goods via Zalando. You pay for the use of the logistics services provided by Berliner. The number of partners has increased from 5000 to more than 5800 partners. Almost 7000 stationary shops are connected to the Zalando platform. The sales made there now account for 30 percent of the gross value of the goods. Zalando sees itself on the right track to increasing the share of the partner program and connected retail to 50 percent by 2025.
Zalando wants to increase market share
“Zalando has identified three growth areas,” says Volker Bosse, analyst at Baader Bank: “The marketplace business, the closer connection with stationary retail (connected retail) and the beauty division.” Regional expansion and increasing customer loyalty are likely to be further growth drivers be: “They still have some work to do, especially with the loyalty program.” More than a million customers are now members of Zalando plus.
It is clear that the online fashion market will continue to grow, as Eva Stüber, member of the management board of the IFH Cologne, states: “Even if the value cannot match the previous years, it is considerable.”
According to Schröder, Zalando’s market share is currently three percent. Market researcher Euromonitor International expects a market volume of 450 billion euros in the long term. Zalando then wants to increase its market share to ten percent. Thomas Maul from DZ Bank considers the targeted share to be easily achievable. Christian Salis from the private bank Hauck Aufhäuser recently saw Zalando as a winner in the European online fashion market.
Sustainability is also making progress, a core issue of the fast-paced fashion business. More than every fifth piece of clothing sold by Zalando is now sustainably produced. “With 140,000 products, our sustainable range is now as large as our complete range when we went public in 2014,” explained Schröder.
In addition, 245,000 second-hand items of clothing can be ordered. The packaging should also become more climate-friendly. Almost all mailing bags have now been converted to paper, and research is being carried out into alternative materials to the plastic sleeve around the products. “But there is still a long way to go,” said Schröder.
More: Touching the Internet: How haptic technology enables the metaverse.