View all newsletters
Receive our newsletter – data, insights and analysis delivered to you
  1. News
March 1, 2022

Zalando on track with 2025 growth plan as FY sales jump

German fashion e-tailer Zalando says it is on track with its 2025 growth plan, fuelled by strong customer growth in 2021.

By Beth Wright

Berlin-based Zalando said the company grew significantly faster than expected in 2021, positioning it well on track of its mid-term growth ambition to reach more than EUR30bn (US$40.2bn) Gross Merchandise Volume (GMV) by 2025.

Zalando reported GMV growth of 34.1% to EUR14.3bn in 2021, driven by continued strong consumer demand for online offerings and increasing partner adoption of platform services. Financial performance started to normalise during the second half of 2021, as expected, given the gradual reopening of European economies, the e-tailer said.

Revenue, meanwhile, grew by 29.7% to EUR10.4bn from EUR8bn a year prior. Adjusted EBIT amounted to EUR468.4m, corresponding to a margin of 4.5%.

In 2021, Zalando gained more than 10m new customers and significantly expanded its reach to now serve more than 48m active customers across 23 markets, including six new markets launched over the course of last year: Croatia, Estonia, Latvia, Lithuania, Slovakia, Slovenia. Customers ordered more than ever before with 5.2 average orders per active customer.

Robert Gentz, co-CEO at Zalando, says: “We are very pleased with our strong results, which demonstrate that we have the right strategy in place to succeed irrespective of the market environment. Our new customer growth and strategic progress in 2021 underline the immense opportunity ahead of us. Leveraging our platform business model, we are in a strong position to achieve our GMV goal of more than EUR30bn by 2025.”

Zalando said it continues to focus on growth and expects 2022 GMV growth of 16-23% to EUR16.6-EUR17.6bn and revenue to grow 12-19% to EUR11.6-EUR12.3bn with the aim to outperform the European online fashion segment in what it called a “volatile market environment.”

The company added it expects to continue to grow profitably and achieve an adjusted EBIT of EUR430-EUR510m. It noted its expectations exclude a potential negative impact from the war in Ukraine.

Zalando also plans to invest further in its European logistics network, adding four new fulfillment centres to its existing network of 12 fulfillment sites in seven countries by 2023.

The total capital expenditure in 2022 is expected to range between EUR400-EUR500m. Over the next 12 months, Zalando will open its fulfillment solutions to partners to support their direct-to-consumer business.

David Schröder, COO, adds: “Zalando creates benefits for both our partners and customers. Our partners gain access to over 48m active customers and our customers can easily find their favorite local and international brands. To enable strong sustainable growth in the future we will continue to invest in scaling and innovating our unique capabilities and infrastructure.”

Zalando excels but a slowdown is on the horizon

Emily Salter, retail analyst at GlobalData, notes Zalando had an impressive year as consumers continued to purchase clothing and footwear online.

She adds Zalando expects FY2022 revenue growth of between 12-19%, marking a slowdown akin to that experienced by other online pureplays like Asos and the Boohoo Group, which has contributed to the decimation of their share prices over the last year.

“The growth guidance includes a potential negative impact from conflict in Ukraine, but Zalando’s limited presence in Eastern Europe will protect it from the worst of this,” she adds.

“Zalando is increasingly focusing on its Partner Program, which allows brands and retailers to integrate their products directly onto its website, while retaining control over assortment, price, and brand representation. This drove stronger GMV growth of 34.1% in FY2021, with its Partner Program and Connected Retail now accounting for 30% of GMV. This is beneficial for Zalando as competition in the multi-brand retailer sphere remains fierce, and as brands such as Nike and Adidas cut ties with partners to focus on their direct-to-consumer operations—with the Very Group announcing it will lose all Nike products from September 2023. Since Zalando’s success rests on its branded offer, it must keep on the good side of brands through initiatives such as the Partner Program.”

Zalando was among the latest 40 companies to commit to environmental not-for-profit Canopy’s Pack4Good initiative, which aims to transform the impacts of the global packaging supply chain on forests.

Related Companies

Topics in this article:
NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. The top stories of the day delivered to you every weekday. A weekly roundup of the latest news and analysis, sent every Monday. The industry's most comprehensive news and information delivered every quarter.
I consent to GlobalData UK Limited collecting my details provided via this form in accordance with the Privacy Policy
SUBSCRIBED

THANK YOU

Thank you for subscribing to Just Style