By Linda Pasquini and Helen Reid
(Reuters) -Online fashion marketplace Zalando expects higher profits in 2025 and stronger sales growth, it said on Thursday, as it tries to win customers by increasing its range of brands and shifting upmarket.
It said the number of active customers and average order value on Zalando increased last year. The retailer also pointed to data that showed online shopping grew in Europe overall as it recovered from the slump that followed shoppers’ post-pandemic return to high street stores.
While online retailers Shein and Temu have lured inflation-weary Europeans to their cut-price clothes and accessories, Zalando has brought more designer brands onto its platform. In February it became the exclusive retailer for Diane von Furstenberg in Europe.
“We see an increase of customers that are shopping the designer proposition online,” Zalando co-chief executive officer Robert Gentz said in a call with journalists. “The more we actually add interesting brands to that section, the more we will see the amount increase.”
Zalando has also added more beauty brands and sports brands and is selling more expensive products, saying shoes priced above 100 euros ($108) now account for 70% of its running shoe sales.
Zalando, whose biggest market is Germany, said it plans to launch in Bulgaria, Greece and Portugal this year, which would bring its total number of markets to 28.
Shares in Zalando, which have gained significantly over the last year, were up around 0.3% by 0850 GMT.
So far, geopolitical upheavals and U.S. tariffs have not impacted the European consumer, co-CEO David Schröder said.
Zalando expects revenue and gross merchandise volume (GMV) to rise between 4% and 9% in 2025, compared with a 4.2% revenue rise to 10.6 billion euros and a 4.5% growth in GMV to 15.3 billion euros last year.
It expects adjusted earnings before interest and taxes (EBIT) of 530 million euros to 590 million euros for 2025, up from 511 million euros in 2024.
The guidance excludes Zalando’s planned acquisition of smaller online fashion retailer About You, expected to close around mid-year.
Zalando’s active customers increased to 51.8 million by the end of 2024, from 49.6 million the year before, while the average order value was 60.9 euros, up from 59.8 euros.
($1 = 0.9246 euros)
(Reporting by Linda Pasquini in Gdansk; editing by Milla Nissi and Barbara Lewis)
