Zalando has opened its second “Tech Hub” outside Germany in Helsinki, starting with ten employees this month and building up gradually to 200. The team will concentrate on the development of innovative customer-oriented products, applications and services, particularly on the mobile shopping front. The new Tech Hub will complement the work of the Zalando Fashion Insights Center created in Dublin last April, where the emphasis lies on the real-time supply of data that will allow the company to better understand market trends.
To cope with its strong growth, which was higher than expected in the first half of this year, Zalando is boosting the capacity of its German logistic center in Mönchengladbach and working on a third one that should start up in the autumn of 2016. It is also setting up a small logistic hub in Italy, in cooperation with a third-party operator, as a pilot project for similar structures in other countries. It should come on stream at the start of next year.
Zalando's sales soared by 31.5 percent to €1.38 billion in the first six months, delivering an adjusted operating profit (Ebit) of €59.2 million for the period, or 4.3 percent of sales, compared with €35 million in the first half of 2014. The growth accelerated in the second quarter to a rate of 34.1 percent, but the Ebit margin declined to 4.1 percent due to excessively generous payment terms for customers, which have led to a wave of systematic fraud on its internet platforms. Zalando says it will give the possibility to pay after delivery to fewer customers in the future.
Sales increased in the first half by 27.6 percent to €758.1 million in the established markets of Germany, Austria and Switzerland, generating an Ebit margin of 6.2 percent. In the rest of Europe, they jumped by 37.8 percent to €550.3 million.
The number of active users across Europe rose by about one million in the second quarter to 16.4 million. Zalando counted 412 million visits on its platforms during the quarter, and 57 percent of them were executed with mobile devices.
The international German-based e-tailer has improved its forecast for the full financial year to a growth rate of between 28 and 31 percent from a previous projection of 20-25 percent. The adjusted operating margin should increase as previously projected to 4.5 percent for the year.
Meanwhile, Zalando launched on Aug. 30 a new digital and print campaign in all its markets, called Share Your Style, where various celebrities call on internet users to share their fashion preferences with others for an instant feedback online. The celebrities are a TV actress, Christina Henricks; a musician and artist, Noah Becker; and a fashion model, Caroline de Maigret.
