Lockdowns Send Zalando to All-time Highs

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Thanks in large part to pandemic-related lockdowns, revenues at Zalando zoomed 46.8 percent in the first quarter, marking one of the best starts to the fiscal year for Europe’s largest online fashion retailer. Revenues hit 2.24 billion euros in the first three months of this year.

“In the first quarter of 2021, Zalando delivered the strongest growth ever since going public in 2014,” chief financial officer David Schröder said in a statement. “We see our platform business unfolding at increasing speed.”

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Over the last four years, the company had been averaging quarterly growth of around 23 percent. Even when compared to the first quarter of 2019, the last “normal” year for fashion shoppers, Zalando still managed revenue growth of close to 40 percent at the beginning of 2021.

Gross merchandise value, or GMV — how much stock Zalando has shifted, as opposed to income it has made from services like logistics and marketing — grew 55.6 percent to hit 3.15 billion euros. In the first quarter of 2019, it was 1.75 billion euros.

The company credited its partner program, through which brick-and-mortar stores can sell products they have in-store. Given that many stores were forced to close due to the pandemic, many more opted to sell through Zalando.

Zalando also increased its number of active customers to 41.8 million over the quarter, an increase of 30.9 percent versus last year. Site visits rocketed 50.2 percent to hit 1.7 billion.

Shoppers were also buying more, with each active customer making 4.9 orders over the three months and spending, on average, 57.90 euros. The company described this as an “all-time high.” During the same period last year, shoppers were only making 4.7 orders and the average spend per purchase was 56.30 euros.

The Berlin-based firm’s expansion into other parts of Europe also continued. In previous years, sales in Zalando’s home markets of Germany, Austria and Switzerland had always been around the same as sales in the rest of Europe. That changed in 2020, when sales in the rest of Europe overtook those in German-speaking territories.

This trend continued over the quarter, with Zalando recording sales of 921 million euros in German-speaking territories and 1.09 billion euros on the rest of the continent. Zalando has bold ambitions to account for more than 10 percent of the continent’s entire fashion market, worth 450 billion euros, in the longer term.

As a result of all this demand, the company is also spending large: It is adding five more logistics centers to its existing network of 10. Centers in the Netherlands and Spain will open this year and construction will begin on new centers in France, Germany and Poland.

Zalando revised its outlook upward yet again by several percentage points. The company now expects revenue growth of between 26 and 31 percent for the full year. It anticipates GMV growth of between 31 and 36 percent.

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