Coronavirus: Zalando updates initiatives to support fashion retailers

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Zalando is anticipating double-digit growth in 2020 despite the challenging trading environment due to the ongoing coronavirus outbreak.The retailer aims to grow its gross merchandise volume by 10-20 per cent and its revenue in the same range.
Growth will be driven by the accelerated consumer shift from offline to online.
// Zalando gives update on range of new initiatives it has introduced to support fashion retailers
// Gross merchandise volume declined by 8% year-on-year in the three weeks following March 9
// Zalando expects adjusted EBITDA to be in the range of minus £77.2m to minus £94.3m

Zalando has revealed that its gross merchandise volume declined by eight per cent year-on-year in the three weeks following March 9, but has now returned to growth.

The online fashion retailer also gave an update on Covid-19 measures by launching a range of new initiatives to support fashion retailers in its partner programme.

Zalando said it would provide faster pay-out terms for its partners in need of immediate cash relief, until the end of June.


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In addition, partners in its Connected Retail programme will be able to sell via the platform without paying commission fees until the end of May.

Zalando has also said it has been improving visibility for small to midsize partners on its platform, which resulted in its partners doubling their sales to more than one million items over the Easter weekend.

“Over the past weeks, we have taken decisive action to protect our employees and our company from the impact of the coronavirus,” Zalando co-chief executive Rubin Ritter said.

“Going forward, we will focus our efforts and our investments on accelerating our platform strategy throughout this crisis.

“For the fashion industry, the time to go online is now, and we can make a difference by supporting our partners to grow their business on our platform.”

According to its preliminary first quarter figures, Zalando’s gross merchandise volume grew by between 13.1 per cent and 14.3 per cent to €1.98 billion (£1.70 billion) to €2 billion (£1.72 billion) in the period.

Meanwhile, group revenues climbed by 10.1 per cent to 11.6 per cent to €1.52 billion (£1.30 billion) to €1.54 billion (£1.32 billion).

Zalando expects its adjusted EBITDA to be in the range of minus €90 million (£77.2 million) to minus €110 million (£94.3 million) due the lower sales growth.

Zalando chief financial officer David Schröder said: “We look back at a challenging quarter. Nevertheless, we have managed to grow our business, and the first weeks of April make us optimistic for the second quarter.”

“We have initiated the right response in order to safeguard the financial success of our business in challenging times and continue to build our strong position in the market.”

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