Zalando reports a decline in sales
Major German online retailer Zalando reported a 2022% year-over-year decline in first-quarter 1,5 revenue to €2,2 billion. The drop in sales is due to the unstable economic situation, rising inflation and, as a result, a change in consumer behavior in Europe, writes Worldfootwear.com.
“Our business fundamentals are strong and we are taking steps to improve our results. We manage Zalando for the long term and have always used the flexibility and adaptability of our business to successfully respond to short-term challenges and customer demand to become better and stronger. We remain confident that we will reach our goal of over EUR 30 billion in GMV revenue by 2025,” commented Zalando co-CEO Robert Gentz.
In the first quarter of the current financial year, the company's gross sales volume (GMV) increased by 1% to 3,2 billion euros compared to the first quarter of 2021. During this period, revenue decreased by 1,5%, reaching 2,2 billion euros.
The German online retailer reported a negative adjusted EBIT of €51,8 million in the first quarter of 2022, compared to a profit of €93 million in the same period last year. This resulted in a negative gross margin of 2,4% compared to a positive margin of 4,2% in the first quarter of 2021, reflecting intensified promotional activities to attract customers and higher costs for organizing the ordering and delivery process.
The company notes that "rising inflation and rising spending for households have contributed to more cautious consumer sentiment, while the weakening of the pandemic has caused changes in consumer preferences." Consumers make a choice in favor of seasonal and trendy goods, and, depending on preferences, either look towards the elite assortment, or move from the average prices to the low-price segment.
To ensure fast delivery, the online retailer is expanding the number of logistics centers: construction has already begun in Frankfurt, in the Polish city of Bydgoszcz, and most recently in Paris. In addition, “following a successful market launch in six countries in 2021,” Zalando is set to launch in two new markets this May, Hungary and Romania.
Major German online retailer Zalando reported a 2022% year-over-year decline in first-quarter 1,5 revenue to €2,2 billion. Drop in sales...
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