Zalando plans to keep outperforming rivals
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Zalando plans to keep outperforming rivals

Online fashion platform Zalando had a great 2016 – and, if the company’s forecast is to be believed, they expect a great 2017 too. In 2016, Zalando saw revenue of €3.6 billion, up 23% from the previous year, and an EBIT margin of €216.3 million – up 5.9% during the same period. In 2017, the company expects revenue growth of 20% to 25% and an EBIT margin of between 5% and 6%. It also expects to create over 2,000 jobs throughout the year.

Zalando’s co-CEO Rubin Ritter said: “Strong growth requires nonstop investment. We are proud to have significantly progressed in expanding our business profitably.

“As we build the technology and operating system to transform the European fashion industry, we will further invest into a unique and flawless consumer experience and a stronger supplier proposition to continue to drive growth ahead of the market. At the same time, we plan to expand our team by creating more than 2,000 new jobs this year.”

Throughout 2016, 20 million people shopped with Zalando, representing a rise of 11%. The company has worked hard to get its logistics business up to a peerless quality, and as a result, its customers have benefited from short shipping times, a generous returns policy, and few goods damaged during delivery.

The company has also been able to attract new brand partners onto its platform. These partners are able to benefit from Zalando’s impressive economies of scale in fulfillment and digital services. And, of course, as the company adds more of these partners to the fold, customers reap the benefits of greater choice.

The company’s final piece of news was the announcement of a new acquisition. Earlier in the week, Zalando agreed to a deal to buy the retail business of KICKZ AG – the leading multi-channel basketball retailer. This deal should let Zalando build up its sports and lifestyle segment, and is expected to be concluded later this year.

Disclosure
Dominion holds Zalando in its Global Trends Ecommerce Fund.


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