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Zalando's Sales Climbed 23% in 2016

Visits and average orders per visit both up for apparel site

March 3, 2017 | Retail & Ecommerce

Berlin-based online footwear and apparel retailer Zalando saw its revenues rise 23.0% in 2016 to €3.64 billion ($4.03 billion), helped in part by increased site visits and more purchases per customer.

The company’s core business in Germany, Austria and Switzerland (DACH) posted a 14.8% increase in revenues to €1.81 billion ($2.00 billion) in 2016. In the rest of Europe, revenues rose 29.6% to €1.57 billion ($1.74 billion). While positive, those gains were slower than the 28.0% and 40.5% increases recorded by Zalando’s DACH and 10-country “rest of Europe” business units, respectively, in 2015.

Zalando’s other businesses—primarily its members-only, discounted products site Zalando Lounge, but also three outlet stores and various portfolio initiatives—brought in a combined €255.1 million ($282.2 million) in revenues, up 53.2% over 2015.

During the year, the number of customers who placed at least one order with Zalando rose 11.2% to 19.9 million, and the average number of orders per active customer increased nearly 13% to 3.48. Overall, the number of orders expanded 25.1% to 69.2 million. Total site visits companywide increased 20.2% for the year to 1.99 billion.

Adjusted earnings before interest and taxes (EBIT) more than doubled to €216.3 million ($240 million) in 2016, with an EBIT margin of 5.9%. However, net income slipped by approximately 1% to €120.5 million ($133.7 million). In a press release announcing its fiscal 2016 results, the company attributed its profitability to “improved operating costs, which reflected strong cost management and general efficiency improvements.”

Top 10 B2C Ecommerce Sites from Which Consumers in Germany Have Made a Purchase, Aug 2016 (% of respondents)

Zalando is one of Europe’s most popular ecommerce destinations—particularly so in Germany, where it got its start in 2009 as an online retailer of footwear. As of August 2016, according to a study by Institut für Demoskopie Allensbach (IfD), it trailed only Amazon.de for ecommerce sites from which consumers ages 14 and older in the country had made a purchase.

The company’s nondigital retail presence is expected to grow in 2017. Earlier this week Zalando agreed to acquire Munich-based multichannel streetwear retailer Kickz for an undisclosed sum. In addition to a website (kickz.com), Kickz operates 15 stores in Germany.

—Cliff Annicelli

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