Online Fashion Retailer Adapts to Changing Consumer Behavior

  • Zalando anticipates a 10-20% increase in full-year sales
  • Growth driven by accelerated shift to online shopping and Zalando’s Partner Programme
  • Over 50 new partners joined the programme, including Vaude, American Eagle Outfitters, and Lipsy London
  • Q1 GMV increased 13.9% to €2bn (£1.75bn)
  • Offprice segment revenue grew 35% year-over-year
  • Lower customer demand in March led to a Q1 adjusted EBIT loss of €98.6m (£86.1m)
  • Sales in April increased as customer demand recovered
  • Zalando confident in full-year profitability

Online fashion retailer Zalando anticipates a 10-20% increase in full-year gross merchandise volume despite a slowdown in March due to the Covid-19 pandemic. The company expects an adjusted EBIT between €100m (£87.3m) and €200m (£174.6m) for fiscal year 2020 compared with €224.9m (£196.4m) in 2019. The growth is driven by the accelerated consumer shift from offline to online shopping and Zalando’s Partner Programme, which has attracted over 50 new partners like Vaude, American Eagle Outfitters, and Next Group brand Lipsy London. Co-CEO Rubin Ritter said, ‘We are confident that we will grow double-digit and at a clear profit in 2020.’ CFO David Schröder added, ‘As a company, we quickly found answers to the challenges in March. We are now seeing a significantly more positive development in the first weeks of the second quarter.’

Factuality Level: 8
Factuality Justification: The article provides accurate information about Zalando’s expectations for growth in GMV and EBIT, as well as details on their Partner Programme and the impact of Covid-19 on sales. It also includes quotes from co-CEO Rubin Ritter and CFO David Schröder to support the claims made.
Noise Level: 3
Noise Justification: The article provides relevant information about Zalando’s expected growth in GMV and EBIT despite the Covid-19 pandemic, as well as details on the company’s Partner Programme and its performance in the first quarter. It also includes quotes from executives discussing their confidence for the full year. However, it could provide more context or analysis on how Zalando is adapting to the changing retail landscape and consumer behavior during the pandemic.
Financial Relevance: Yes
Financial Markets Impacted: Zalando’s stock price and other online retailers
Financial Rating Justification: The article discusses Zalando’s financial performance, including its projected EBIT for the fiscal year 2020, growth in GMV, and impact of Covid-19 on sales. This information is relevant to investors and can potentially affect the stock prices of Zalando and other online retailers.
Presence Of Extreme Event: No
Nature Of Extreme Event: Other
Impact Rating Of The Extreme Event: Minor
Extreme Rating Justification: There is no extreme event mentioned in the article, but the company experienced a temporary slowdown in sales due to the Covid-19 pandemic and reported a loss in adjusted EBIT in the first quarter.

Reported publicly: www.retailsector.co.uk