– A number of key financial indicators at German online fashion retailer Zalando improved over the second quarter of the year. Revenues rose 3.4 percent to 2.
64 billion euros over the period. This meant that for the first half of the year, the German e-commerce giant’s revenues rose 1.5 percent to 4.
88 billion euros. Gross merchandise value, or GMV, which measures how much inventory the platform has moved and which is usually higher than the company’s revenues, was also positive. In the second quarter, shifted 3.
84 billion euros worth of product, an increase of 2.8 percent. That equals sales of 7.
13 billion euros worth of product over the first half of this year, 2.4 percent more than the same period last year. Additionally, the company’s adjusted group EBIT — earnings before interest and taxes, or operating profit — rose 18 percent, climbing to 171.
6 million euros from 144.8 million euros over the same period last year. Operating costs, including the cost of marketing, administration and fulfilment, fell.
The results, coming after more than a year of lower growth, show that the company’s turnaround strategy is delivering, Zalando co-chief executive officer Robert Gentz said in a statement. “Our ecosystem strategy empowers us to cover a larger share of the fashion and lifestyle e-commerce market, and the positive response from customers and partners in the second quarter validates our vision,” he stated. In short, the new strategy is about becoming more of a lifestyle destination for customers and pushing products from categories like beauty, sportswear, premium and luxury, streamlining logistics and ratcheting up inspirational magazine-style content to draw more shoppers in.
This is meant to help Zalando compete with online retailers like China’s Shein, who focus on fast fashion and lower prices. The other part of Zalando’s new strategy involves more of a focus on partnering with businesses, providing online sales and fulfilment services to brands. Some of Zalando’s other key indicators looked more static.
The e-commerce specialist had slightly fewer active customers and average orders per customer in the second quarter. These fell 1.3 percent to 49.
8 million and 3.2 percent to 4.9 orders per customer, respectively.
The total number of orders rose 0.3 percent to 63.4 million in the second quarter.
The value of each customers’ basket, or spend, rose 4.6 percent to 60.8 euros.
Zalando confirmed its guidance for the year. “The market continues to show gradual signs of recovery and we expect further acceleration over the course of the year,” it said. Zalando predicts both revenue and GMV to increase in the low single digits over the year, with the highest expected growth at 5 percent, and EBIT somewhere between 380 million and 450 million euros.
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