Zalando reports solid growth helped by male shoppers

[BERLIN] Zalando, Europe's biggest pure online fashion retailer, saw first-quarter sales grow 23 per cent, supported by a marketing campaign featuring US actor James Franco aimed at attracting more male customers.

Founded in Berlin in 2008, Zalando has expanded rapidly and now delivers 1,500 brands in 15 countries, with women accounting for the bulk of its sales. However, as growth has slowed, it is pushing into new categories like menswear and sports gear.

Zalando, which already reported preliminary results last month, said sales came in at 980 million euros (S$1.5 billion), while adjusted earnings before interest and taxation (EBIT) was flat at US$20.3 million, broadly in line with analysts forecasts.

The 23 per cent rise compares with a growth rate of 24 per cent in the same quarter a year ago and a rate of 26 per cent in the fourth quarter of 2016.

Sales rose 17 per cent in Zalando's core Germany, Austria and Switzerland region and 28 per cent in its other, newer markets in Europe. It reiterated a forecast for 2017 sales growth of 20 to 25 per cent and an EBIT margin of 5 to 6 per cent.

British rival ASOS, which trades at a premium to Zalando as it is seen as better insulated from Amazon's push into fashion, last month lifted its annual sales forecast to between 30 and 35 per cent, but stuck to its profit outlook.

Zalando said it exceeded 20 million active customers at the end of the first quarter, compared to some 14 million at ASOS, which targets a narrower market of fashion-conscious twenty-somethings.

REUTERS