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Zalando grows

Anna Pakulniewicz 10 May 2017

Anna Pakulniewicz

Journalist

+48 22 356 25 07
anna@eurobuildcee.com

Ania covers the Baltic states’ real estate markets, architecture and urban planning in Warsaw as well as interior design. She is also the co-founder of Eurobuild TV. Among others, she has been employed by TVN CNBC, PAP Insider, WBJ (The Observer), Poland Monthly and IMM. She graduated from the Warsaw School of Economics, majoring in international relations. She has also completed postgraduate studies in macroeconomic analysis. In addition to this, she studied Lithuanian philology

EUROPE In the first quarter of 2017 Zalando continued to outperform the European fashion e-commerce market with revenues growing strongly by 23.1 pct to EUR 980.2 mln (Q1 2016: EUR 796.1 mln).

The adjusted EBIT of EUR 20.3 mln remained at a similar level to previous years (Q1 2016: EUR 20.2 mln) with a margin of 2.1 pct (Q1 2016: 2.5 pct).

Zalando recorded 617.6 mln hits on its site in Q1 2017 compared to 479.5 mln a year before. Around 68.8 pct were from mobile devices (Q1 2017).

“Our key priority is profitable growth, and that is what we delivered on in the first quarter,” said co-CEO Rubin Ritter. “We are determined to win further market share and reach more customers across Europe. That is why we will continue investing in the consumer experience, our technology and logistics infrastructure, as well as our brand partner proposition,” he added.

Zalando had more than 20 mln active customers at the end of the first quarter 2017. The high customer baseresulted in more frequent orders, reflecting a more loyal shopping behavior. The increase was also, strengthened by the increasing use of mobile devices. This translated into growth of revenues up by 28 pct. to EUR 428.3 mln across Europe (excluding German-speaking countries) compared to EUR 334.5 mln in Q1 2016. Outside German-speaking countries margins were negative (-4.5 pct) but down from the previous year’s -5.1 pct. However the company recorded a margin of -0.2 pct for the full year.

The strong growth rate was also supported by prominent marketing campaigns such as the “Man Box" campaign with US actor James Franco and the addition of further highly fashionable brands such as Oysho.

Zalando continued to push forward strategic investments into its infrastructure as well as customer and brand proposition. Examples include the ramp-up of new fulfilment centres and investments such as same day delivery and instant returns to enhance Zalando’s customer experience. The resulting increase in fulfilment costs and a small decrease in gross margin were mostly offset by more efficient marketing activities, benefitting from a strong brand awareness and loyal customer base.

Capital expenditure in the first quarter of 2017 was at EUR 78 mln, excluding M&A, reflecting investments primarily in infrastructure and in-house developed software. Zalando is looking to increase capital expenditure to around EUR 200 mln in 2017, excluding M&A.

Zalando will report results for the second quarter 2017 on August 10, 2017.


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10 May 2017

Zalando grows

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