Zalando expects to report strong Q2 results

Zalando expects to grows its Gross Merchandise Volume by 10 to 20 percent this year. Its revenue is also expected to increase in the same range. Meanwhile, the overall fashion market is expected to decrease by about 28 percent due to the coronavirus outbreak.

Recent research from McKinsey shows the state of fashion in 2020 and they estimate that revenues for the global fashion industry will decrease by 27 to 30 percent in 2020 year-on-year. But it looks like Zalandowill get away with it, as they show a growth outlook that is significantly above the overall fashion market.

According to the German fashion player, the predicted growth will be driven by the fact more consumers are changing from offline to online shopping. “And Zalando’s ability to invest independent of demand fluctuations and a challenging environment, as well as its accelerated platform transition”, the company explains.

50 new partners joined program in past three weeks

Due to the governmental restrictions across Europe after the coronavirus outbreak, fashion brands are transferring more of their business online to keep reaching their customers. This has led to the Partner Program share of Zalando’s GMV increasing 4.4 percentage points year-over-year in the first quarter. In the past three weeks alone, 50 new partners joined the program.

Connected Retail program expands in Europe

Last month, physical retailers in Germany and the Netherlands shipped almost 350,000 items to Zalando customers. As of the third quarter, the fashion giant will also offer this Connected Retail program to brick-and-mortar retailers in Spain, Sweden, and Poland.

‘Clearly profitable in 2020’

Zalando expects to be ‘clearly profitable’ with an adjusted EBIT between 100 and 200 million euros, it also wants to make investments worth somewhere between 230 and 280 million euros. “This will allow our partners to grow and gain market share in a challenging economic environment by building their business on Zalando. Many of them have significantly increased their activities on our platform in the past weeks, and we will continue to make it easier for them to reach customers across Europe”, co-CEO Rubin Ritter says.

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