Online fashion marketplace Zalando reported a profit increase due to its focus on higher-priced brands and sportswear. Competing with low-cost retailers like SHEIN, Zalando’s gross merchandise volume—a measure of total goods sold—rose 2.8 per cent to € 3.8 billion in the second quarter, with revenue growing by 3.4 per cent.
Zalando has emphasised high-priced brands and sportswear to stand out from cheaper competitors. This strategy worked well, with the sports category seeing double-digit growth, according to CFO Sandra Dembeck. The company expects continued growth in the second half of 2024.
In the second quarter, Zalando launched sports campaigns in major European cities featuring soccer stars like Robert Lewandowski and David Alaba, capitalising on events like the UEFA Euro 2024 and the upcoming Olympics. The company also saw strong performance in running wear.
Recently, Zalando added sports brands like Lululemon, Hoka, and On Running, along with its own sports collection. The company expects gross merchandise volume and revenue to grow by 0 per cent to 5 per cent this year, with adjusted earnings before interest and tax (EBIT) projected between € 380 million and € 450 million. Quarterly adjusted EBIT rose by 18.5 per cent to € 171.6 million, exceeding expectations by 3 per cent, while active customer numbers increased for the first time since 2022, reaching 49.8 million.
Zalando also announced that CFO Sandra Dembeck will not renew her contract beyond 28th February 2025.
