// Zalando is turning to marketing cuts rather than job cuts amid challenging trading conditions
// Co-founder Robert Gentz: “Our plan is to keep employment by the end of this year steady.”
Online fashion giant Zalando chief is scaling back marketing rather than cutting jobs as the sector grapples with a consumer spending slowdown.
In an interview with the Financial Times, co-founder Robert Gentz said that the Berlin-based clothing retailer would not be axing staff like its retail rivals.
While he said the business has been “more cautious in hiring”, he told the FT: “Our plan is to keep employment by the end of this year steady.”
READ MORE:
- Zalando lowers profit guidance but expects return to growth in second half
- Zalando to ditch mulesed wool, backs ban proposals
- Zalando buys online magazine Highsnobiety
Gentz said that Zalando has been able to offset many of the price rises by focusing on profitability and scaling back marketing spend.
He told the publication that the company had also reduced free shipping offers to limit loss making small orders.
It comes as the pandemic boom of online shopping continues to fade for many retail giants and more and more customers are forced to limit spending.
Earlier this month, Zalando revealed a 58% drop in second-quarter operating profit and lower than expected sales amid a challenging macroeconomic environment and supply chain challenges.
The company’s gross merchandise volume was flat in the quarter at €3.8 billion after trading was impacted by lower consumer confidence and inflationary pressures.
Zalando cited headwinds from external factors such as lower consumer confidence, inflationary pressures and selected supply shortages impacting availability.
“Our foundation is very strong. We expect a return to growth and profitability,” Gentz said earlier this month.
The business has said it expects to post improved profitability and a return to growth in the second half of the year after its number of active customers grew by 11% to over 49 million in its second quarter.
Click here to sign up to Retail Gazette‘s free daily email newsletter
