Zalando terminates private label division

Zalando's main office in Berlin

German fashion web shop Zalando will be integrating its private labels into the rest of the platform. The idea is for these labels to compete less with external brands. For that reason, the separate private label division will be terminated, which may result in jobs being cut.

 

Fewer private label brands needed

Up until now, zLabels is an autonomous division for Zalando's private labels, but it will be terminated on 1 April. Instead, private labels such as Anna Field, Komi and Pier One will be managed in the same way as the partner brands. As such, Zalando intends to shift towards a "complementary assortment strategy", both for private labels and partner labels. This means the fashion retailer will also be reviewing its range: the idea is for a limited amount of private labels with basic everyday items to remain by the time the spring collection for 2020 arrives.

 

"zLabels was founded in 2010 in order to fill the ‘blank spots’ in our assortment, offering our customers products that were not being provided by our partner brands. In the last 10 years, our business has become more attractive to both customers and brands. Since we are committed to our platform strategy, and as we continuously onboard new brands and verticals, we decided to refine our assortment including our own labels," says co-CEO David Schneider, explaining why the current set of eleven private labels has become less of a necessity. 

 

Collaborating under one roof

The new approach allows all involved parties to collaborate under one roof, "with a strategic direction for our own assortment which will be more complementary to our partner brands", Schneider continues. In other words: Zalando wants to go back to being more of a retailer and less of a competitor to its own partners.

 

A few years ago, zLabels was actually planning to take a more autonomous course, offering its labels on competing platforms such as Asos, Amazon and Tmall. After the restructurings, Zalando claims "a significant number of the 550 zLabels employees" will be moving to new, comparable positions within the company, but it is still possible some jobs will be cut.