Fashion e-retailer Zalando is pressing on with logistics investments as its profit margins come under pressure despite double-digit revenue growth in the first quarter.
The German-based firm said in a trading update today that it expects growth of 22 – 24% to revenues of €971-987 million in the first quarter of 2017, according to preliminary figures.
Zalando expects to achieve an adjusted EBIT of €10-30 million, corresponding to an adjusted EBIT margin of 1.0-3.0%, in the quarter. This could thus be lower than the corresponding figure of €20.2 million, or a 2.5% profit margin, for the same period last year.
The company also confirmed its full-year guidance of revenue growth in a range of 20-25% and an adjusted EBIT margin in the range of 5.0-6.0%.
Co-CEO Rubin Ritter said: “We continue to successfully execute towards our goals and started 2017 with strong growth momentum. We are fully on track with our long-term aspirations and keep expanding our business at high speed, while investing into our consumer experience and brand partner proposition.”
Meanwhile, Zalando extended its European logistics network last month with the official opening of its new satellite warehouse in Moissy-Cramayel, 30km south of Paris. The facility is operated by logistics provider Arvato which specialises in international supply chain and e-commerce.
The 20,000 sqm facility will cater to the needs of Zalando French customers and fulfill the increasing demands of one of the biggest fashion markets in Europe. In addition to reducing delivery times, the new fulfilment center will enable a more efficient management of the distribution chain in France. In the future, it could also facilitate the testing of new services.
In the last few months, Zalando has announced the expansion of its European logistics network with new locations in Sweden, Poland and this one in France, after successfully launching a new satellite warehouse in Italy (Stradella) in 2015. Four centrally located fulfillment centers in Germany form the heart of the network.
Zalando, which describes itself as Europe’s leading online fashion platform, offers an assortment of over 1,500 international brands and private label products to customers in 15 European markets.
