Zalando has big plans for 2018
Sales growth of 20 to 25 percent, new brands and business areas as well as 2000 additional employees: the online retailer Zalando has a lot in store.
Zalando’s Co-CEO Rubin Ritter confidently sets the course: “In 2017 we expanded our market share in all our countries. For the current year, we are targeting sales growth of 20-25 % for the fourth year in succession. This underscores our conviction that growth is the right strategy for long-term value maximization”. In the middle of the range, this corresponds to an increase in sales of around 1 billion euros. In addition, the online fashion platform is aiming for an adjusted EBIT of 220-270 million euros.
In March, Zalando launched a new beauty category
To achieve these goals, Zalando is expanding its product range. The new beauty category was launched at the end of March. Zalando Beauty launched over 4,000 products from more than 120 brands. The company will also add new fashion brands such as Swarovski and Massimo Dutti.
Making more use of digital opportunities
Another step towards achieving these goals is to make greater use of digital possibilities. The Group is thus focusing on an increasing personalization of the shopping experience. The goal is to offer each customer an individualized Zalando shop. In addition, the online fashion platform is expanding its cooperation with stationary retailers in Germany via the gaxsys software solution. Retailers can now send not only shoes but also textiles from their stationary stores to Zalando customers. “The cooperation enables us to support smaller retailers with limited technological infrastructure in their entry into the online business and to offer them an additional sales channel. The project has developed very positively. Individual retailers shipped up to 300 orders per week directly from their stores to Zalando customers,” says Jan Bartels, VP Customer Fulfillment and Logistics at Zalando.
Expansion of the workforce and logistics
To manage growth, the company is expanding its logistics and workforce. Construction of the logistics centers in Lodz and Verona is progressing. The Szczecin and Stockholm sites are continuing to increase their capacities and further automation is imminent in Lahr. In addition, around 2,000 additional jobs are planned for 2018, the majority of them in Berlin. In the fiscal year 2017, Zalando has already increased the number of employees from around 12,000 to 15,000.
Positive review of fiscal year 2017
The company looks back positively on the past fiscal year: Zalando recorded a 23.4 percent increase in sales to 4.489 billion euros in 2017 and thus in the upper half of the targeted range of 20 to 25 percent. The sales development is mainly attributable to a larger customer base and a higher number of orders. The number of active customers rose from 19.9 million (2016) to 23.1 million (2017). The growing customer base also ordered more frequently. The average number of orders per active customer rose from 3.5 (2016) to 3.9 (2017), reaching a new all-time high. Zalando achieved an adjusted EBIT of 215.1 million euros in fiscal 2017. This corresponds to a margin of 4.8 percent.
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