Zalando focuses on activewear

Zalando is evidently aiming to establish itself as a major online shopping destination for sports fashion in Europe. In line with current lifestyle trends and the growing concern for health and fitness, it is offering more sports clothing and footwear for running, training, fitness, yoga, tennis and other sports, especially on its German website.

“This is the season that fashion meets sports,” says the giant e-tailer. In this context, the fast-growing European retailer has launched a marketing campaign for the spring-summer season targeting young women between the ages of 20 and 30, centering around athleisure and featuring an award-winning fashion model, Anna Ewers, and two special dancers, Lil Phoenix and iDance Mikey. Part of the campaign is associated with the upcoming Uefa Champion's League in Europe and the Olympic Games in Rio de Janeiro. The campaign started in the Netherlands and Belgiuim on Feb. 21, with all other markets to follow.

Exceeding a medium-term growth target of 20 to 25 percent, the company's sales increased by 33.6 percent to €2.96 billion in 2015. They rose by 28 percent to €1,580 million in the German-speaking countries and by 40.5 percent to €1,212 million in other European countries, where the company started offering products online at a later stage.

However, Zalando reported an adjusted operating margin (Ebit) of 3.6 percent for the year, slightly below the 3.7 percent rate recorded in 2014. The margin declined by 0.3 percentage points to 6.4 percent in the German-speaking countries, but it improved in the rest of Europe, moving to a still negative rate of 0.3 percent of sales from a negative 1.3 percent margin in 2014.

Interestingly, around 60 percent of the traffic on its 15 websites came from mobile devices during the fourth quarter, up from 48 percent a year earlier. The number of active customers grew by 22 percent in a year to reach 17.9 million at the end of the period, averaging more than 135 million visits per month. Zalando's app was downloaded 16 million times in 2015 compared with seven million times in the previous year.

Zalando plans to invest about €200 million on its multiple initiatives in 2016, up from €70 million last year. It is forecasting an adjusted Ebit margin of 3.0 to 3.5 percent for the year. Sales should grow by close to 25 percent, allowing the company to continue to win market shares in the online space.