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Coronavirus lockdowns turbo-boost sales at Europe’s largest fashion platform

Jill Petzinger
·Germany Correspondent, Yahoo Finance UK
·2-min read
10 April 2019, Berlin: The newly opened headquarters of the Zalando Campus in Valeska-Gert-Straße. The campus consists of 12 buildings with currently 6000 employees. Photo: Jens Kalaene/dpa-Zentralbild/dpa (Photo by Jens Kalaene/picture alliance via Getty Images)
Zalando now has 34 million active customers across Europe. Photo: Jens Kalaene/picture alliance via Getty Images

The coronavirus lockdowns that confined people across the EU to their homes in the second quarter proved to be a boon for online fashion retailer Zalando (ZAL.DE).

The Berlin-based e-commerce company said in its quarterly report on Tuesday that sales had grown by just over 27% to €2.03bn ($2.38bn, £1.82bn ) in the second quarter, compared to the same period last year.

The e-fashion platform said it gained around three million new customers in the first half of the year, a boost of over 20% from the year before. It now has 34 million active customers across Europe.

“In the first months of 2020, and during lockdown, Zalando saw significant growth of strategically relevant categories like leisure clothes, fashion for kids, sports clothes, and accessories,” a Zalando spokesperson told Yahoo Finance UK via email. “The beauty category more than tripled year-over-year, with customers looking to bring the spa to their home.”

The number of fashion retailers selling their products through Zalando has also soared — 180 new brands joined the platform in the second quarter.

Zalando’s gross volume of goods rose by around 25% in the first six months of 2020. Profit — reported as adjusted EBIT — rose from €108m to €111.3m in the first half.

READ MORE: Fashion and beauty shops 'struggling to survive'

“In recent months we have proven that Zalando is strong and agile, no matter how challenging the environment is,” Zalando chief financial officer David Schröder said. “Many partners are much more active on our platform and were able to grow successfully together with us.”

Zalando raised its full-year forecast in July, and is now targeting sales growth of between 15% and 20% this year — up from previous expectations of 10% to 20% growth. It is now expecting an operating profit (EBIT) of between €250m and €300m in 2020.

The company’s results reflect a boost in online sales and new customers during the pandemic lockdown reported by its UK rival ASOS in the last month.

ASOS saw sales rise 10% in the four months to June 30, and a 16% growth in its active customer base to 23 million. However, it expressed caution on its outlook in the short-to-medium term over uncertainty about coronavirus restrictions on people’s social lives.