Skip to main content
BoF Logo

The Business of Fashion

Agenda-setting intelligence, analysis and advice for the global fashion community.

Zalando Cuts Spending and Investment as Coronavirus Continues

The fashion retailer is also planning to waive its commission fee for all new and existing physical stores that sell their goods on its platform.
Zalando logistics centre | Source: Courtesy
By
  • Reuters

BERLIN, Germany — German online fashion retailer Zalando said on Monday it was trimming spending and investment as coronavirus lockdowns hit its sales and profitability, while it would speed up an initiative to help currently closed stores to sell online.

"We have seen a negative impact on sales since the lockdowns in several countries. This is also affecting our bottom line," the Zalando management board said in a letter.

Europe's biggest pure online fashion retailer said it was reacting by adjusting spending and investment, but added it was less affected than many in the industry, noting it currently had a cash balance of more than €1 billion ($1.10 billion).

It is planning to waive its commission fee for all new and existing physical stores that sell their goods on its platform from April 1 to May 31, while also earmarking 100 million euros of cash to pay early for goods and services already received.

ADVERTISEMENT

Zalando said it is already helping more than 1,500 bricks-and-mortar stores to sell via its site: "We are now accelerating this initiative to support brands and retailers to uphold at least a part of their business."

Stores have been closed across Europe to try to contain the coronavirus and some retailers are also scaling back or halting their online activities to try to safeguard workers' health.

Zalando said in a statement it expects first-quarter sales and earnings before interest and taxation (EBIT) to be significantly below an analyst consensus of March 11 and it assumes it cannot achieve the full-year forecast it gave on Feb. 27.

Zalando had previously forecast sales growth of 15 to 20 percent for 2020, down from 20.3 percent in 2019.

Zalando said it would give further information in a trading statement on April 16, but would postpone its annual general meeting scheduled for May 20.

By Emma Thomasson; Editors: Franklin Paul, Giles Elgood

In This Article
Topics
Organisations

© 2024 The Business of Fashion. All rights reserved. For more information read our Terms & Conditions

More from Retail
Analysis and advice from the front lines of the retail transformation.

What a Fashion Company Is Worth Today

In an era of austerity on Wall Street, apparel businesses are more likely to be valued on their profits rather than sales, which usually means lower payouts for founders and investors. That is, if they can find a buyer in the first place.


What’s the Plan at H&M?

The fast fashion giant occupies a shrinking middle ground between Shein and Zara. New CEO Daniel Ervér can lay out the path forward when the company reports quarterly results this week.


view more

Subscribe to the BoF Daily Digest

The essential daily round-up of fashion news, analysis, and breaking news alerts.

The Business of Fashion

Agenda-setting intelligence, analysis and advice for the global fashion community.
CONNECT WITH US ON
BoF Professional - How to Turn Data Into Meaningful Customer Connections
© 2024 The Business of Fashion. All rights reserved. For more information read our Terms & Conditions, Privacy Policy, Cookie Policy and Accessibility Statement.
BoF Professional - How to Turn Data Into Meaningful Customer Connections