Tuesday, April 20, 2021

Zalando pushes ahead with major investment despite dip in profits

Zalando‘s net profit may have declined in the fourth quarter despite growing revenue, but the German online retailer is still pushing ahead with significant investment to expand the business.

The Berlin-based etailer, which trades in the UK and all over Europe, plans to spend €200 million (£170 million) in the year ahead for the creation of more than 2000 jobs and to invest in infrastructure, increased automation and software.

The company also plans to move into physical stores, and has agreed on the acquisition of basketball retailer Kickz for an undisclosed sum.

In its fourth quarter, Zalando‘s net profit fell to €60 million (£51 million) compared to the €102.7 million (£87.5 million) recorded in the period a year earlier. 

READ MORE: Zalando’s quarterly sales smashes €1bn mark for the first time

However, revenues increased 25.7 per cent to €1.09 billion (£928 million) as Europeans bought more fashion items online. 

Meanwhile, adjusted earnings before interest and tax of €95.6 million (£81.4 million) slightly beat analysts’ average estimate of €92 million.

“Strong growth requires nonstop investment. We are proud to have significantly progressed in expanding our business profitably,” Zalando co-chief executive Rubin Ritter said.

“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.”

Click here to sign up to Retail Gazette’s free daily email newsletter



Please enter your comment!
Please enter your name here