Zalando is Europe's leading online retailer of shoes and fashion, with operations in fifteen different countries in Europe.
Zalando started its operations in Germany in 2008 and today operates online shops also in the Netherlands, Belgium, France, the United Kingdom, Austria, Switzerland, Italy, Spain, Sweden, Finland, Norway, Denmark, Luxembourg, and Poland. Zalando has grown rapidly and is today the largest online player by net revenues in the fashion sector in Europe.
The key drivers for becoming successful within shoes and fashion include technology, product sourcing, logistics and marketing. Zalando has over the past five years focused on becoming the industry leader in all these fields in the online sector in its operating markets.
Zalando has developed strong relationships with most of the leading suppliers in the shoes and fashion industry. The company is today a well-established player in the European market which makes it possible to further improve delivery and payment terms with key suppliers. In addition, Zalando has focused on establishing its in-house design labels.
Convenience is one of the most important factors for customers moving online which is why free deliveries and returns for customers are a very important part of the Zalando customer offering. In addition, Zalando has a generous return policy resulting in an average return rate of around 50%. This makes it very important to have a cost efficient and best in class logistic set up. Zalando has therefore, as part of the company’s strategy, decided to operate most of its logistics in-house. The first warehouse operated by the company was opened in 2011 and a second warehouse built in the city of Erfurt in Germany did successfully start to operate during the second half of 2012. To facilitate the company’s strong growth, Zalando is currently ramping up a third warehouse in the city of Mönchengladbach in Germany. Test operations were successfully initiated as planned in August 2013.
Zalando reported net sales of EUR 437m in the second quarter of 2013 compared to EUR 257m in the second quarter of 2012. For the first half of 2013, net sales amounted to EUR 809m compared to EUR 471m in the first half of 2012. The company’s geographic and category diversification continues with Germany and shoes representing less than 50% of first half 2013 net sales, respectively. The half year numbers are fully audited. For the full year 2012, net sales amounted to EUR 1,159m. Sales growth and margins in the first half year were impacted by the long winter in Europe, delaying the start of the spring season. Margins continued to improve in the first half of 2013 as compared to the first half of 2012, albeit at a slower pace due to the adverse weather effects and continued investment in growth.
With the addition of seven new markets during 2012, Zalando’s focus for 2013 continues to be on operational excellence in key areas including logistics and marketing within its current geographical footprint. For example, significant progress has been made with respect to the company’s transition towards operating three large warehouses in-house. Also, customer growth was supported by continued high brand awareness in established countries as well as strong developments within the countries entered during 2012.
Following the completion of the first half 2013 Anders Holch Povlsen, the CEO and owner of Bestseller and the Ontario Teachers’ Pension Plan (OTPP) joined Zalando’s shareholder group in a secondary and primary share transaction, respectively.