Zalando announces strategy to return to growth

In 2023, Zalando’s GMV decreased 1.1 percent to 14.6 billion euros and revenue declined 1.9 percent to 10.1 billion euros.

Full-year adjusted EBIT rose to 350 million euros, resulting in an adjusted EBIT margin of 3.5 percent, up 1.7 percentage points from 2022.

The company has announced a strategy to build a pan-European fashion and lifestyle e-commerce ecosystem around two growth vectors: business-to-consumer (B2C) and business- to-business (B2B). Zalando aims for a CAGR rate of 5 to 10 percent for both GMV and revenue over the next five years and the outlook for adjusted EBIT as a percentage of revenue is 6 to 8 percent in 2028.

“Our ambition is to return to strong growth and continue our margin expansion, as reflected in our new mid-term guidance,” said Robert Gentz, co-CEO of Zalando.

“In B2C we will move beyond transactions by giving our 50 million customers across Europe even better quality experiences and products that fit their lifestyle and personalised content, inspiration and entertainment. In B2B, we will power the businesses of partners and merchants on and off Zalando, leveraging our unique logistics infrastructure, software and services,” Gentz added.

The share of partner business in the Fashion Store’s GMV increased by 2.8 percentage points to 39.2 percent and the share of items shipped by Zalando Fulfilment Solutions increased by 4 percentage points to 62 percent in the fourth quarter compared to the previous year.

Adjusted EBIT rose 25 percent to 183 million euros in the fourth quarter.

In 2024, Zalando plans to return to growth, further increase profitability and invest in future growth. The company expects GMV and revenue to grow 0 to 5 percent in 2024 compared with 2023 and expects adjusted EBIT to be between 380 million euros and 450 million euros.