The summer of 2021 was considered by many to be a relatively good summer. The number of corona infections remained rather low, the vaccination rate increased, and so did the mood. For the fashion retailer Zalando it was even a great summer. The share rose to a record high of around 105 euros and then even entered the leading German index, the Dax. But a few months later, the situation is very different. The share price has almost halved again and is not far from pre-pandemic levels. So is the Corona boom over for Zalando?
At first glance, the annual balance sheet for 2021 contradicts the weak share price, which the group presented on Tuesday morning. Zalando exceeded the ten billion euro mark in sales for the first time and achieved a whopping increase of almost 30 percent. The profit rose by eleven percent to 468 million euros.
However, and this is the crucial point: the times of great growth are over, the group warned. That didn’t go down well on the stock market. The Zalando share fell by nine percent at the start of trading, only to catch up again slightly afterwards.
For the current year, the Dax group only expects a sales increase of twelve to 19 percent. “We have been seeing demand normalizing since the summer,” said Zalando board member David Schröder, who is responsible for operational business.
Zalando was able to increase the number of customers
After a period of euphoria, online trade as a whole is now simply growing less strongly, says industry analyst Volker Bosse from Baader Bank. That also influenced Zalando’s share price. The return of offline shops and shopping streets also hit the group. According to a KPMG study, the so-called stationary trade still accounts for around 75 percent of the industry’s turnover – even if the share is to fall, according to this forecast to only 50 percent in 2030.
Economist Gerrit Heinemann from the Niederrhein University of Applied Sciences is also banking on this long-term trend. Zalando remains on the road to success, he says. After all, the group has firmly established itself as a result of the crisis. Because during the pandemic, many ordered there for the first time. And new customers are particularly valuable in online business. In order to win just one new customer, corporations would have to spend 150 to 200 euros each, estimates Heinemann. The more active users in the database, the better for Zalando. “The customer base should be worth six to eight billion euros,” estimates Heinemann.
And the trunk grows. Zalando now has more than 48 million customers, an increase of around ten million compared to the end of 2020.