Zalando turnover ‘only’ grew 36 % in fourth quarter

Zalando turnover ‘only’ grew 36 % in fourth quarter

Online shoe seller Zalando has seen its growth slow down, as its fourth quarter of 2013 'only' had a 36 % growth. The growth has been slowing down for some time now, from 70 % in the first half and 42 % in the third quarter.

Soft winter partly to blame for smaller growth

The soft European winter and the increased online competition from parties like H&M and Inditex (Zara, Massimo Dutti, Bershka) are two significant reasons as to why the turnover growth has been increasingly slower in the past few quarters, although it is also only natural that such huge growth rates slow down eventually.

 

Zalando’s fourth quarter resulted in a 550 million euro turnover, with total year turnover at 1.762 billion euro - a 52 % increase on 2012. Its core market (Germany, Austria and Switzerland) still haul in the bulk of turnover, with more than 1 billion euro.

 

Still operating at a loss

In this region Zalando has already managed to become break-even, but on a global scale, the company is still operating at a loss. The operational margin is - 6.7 %: a 0.5 % improvement compared to 2012, but that is still too small to ensure Zalando will become profitable all around. The operational margin has to continue to evolve towards positive numbers and to make that possible, Zalando wants to focus more on clothing with bigger profit margins.

 

According to the company, its online store welcomes more than 100 million visits per month, with a third (35 %) through smartphones and tablets. On a yearly basis, more than 13 million people bought something at Zalando, which is a significant increase over 2012's 9 million.

 

Zalando’s worth is estimated to be 3.83 billion euro, as Kinnevik (a Swedish investment firm with 36 % of Zalando’s shares) estimated its own stake to be worth 12.14 billion krona. The news about Zalando’s fourth quarter is all it wishes to divulge, as speculation about a possible IPO remains what it is now: speculation.

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