Zalando Cuts 2023 Sales Forecast as Demand Stays Weak

The logo of fashion retailer Zalando is pictured at the new headquarters in Berlin, Germany, April 10, 2019. REUTERS/Hannibal Hanschke
The logo of fashion retailer Zalando is pictured at the new headquarters in Berlin, Germany, April 10, 2019. REUTERS/Hannibal Hanschke
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Zalando Cuts 2023 Sales Forecast as Demand Stays Weak

The logo of fashion retailer Zalando is pictured at the new headquarters in Berlin, Germany, April 10, 2019. REUTERS/Hannibal Hanschke
The logo of fashion retailer Zalando is pictured at the new headquarters in Berlin, Germany, April 10, 2019. REUTERS/Hannibal Hanschke

Europe's biggest online fashion retailer Zalando sees continued pressure on demand for the rest of the year and now expects 2023 sales to decline, the company said on Wednesday as it reported weaker than expected third-quarter revenue.

Zalando, a multi-brand platform that sells clothes, shoes, accessories, and beauty products, has been hurt by a pullback in online shopping after a COVID-19 pandemic-era boom, a trend that has also bruised smaller online-only retailers like ASOS and Boohoo, Reuters reported.
Zalando now expects 2023 revenue to fall by between 0.5% and 3%, having previously guided to a 1% decline at worst. Third-quarter sales of 2.275 billion euros ($2.41 billion) missed analysts' estimates and were down 3.2% from the same quarter last year.
An unusually warm September weighed on sales of autumn and winter clothes, Zalando said, exacerbating the impact of weak consumer sentiment. The Germany, Austria, and Switzerland region, which accounts for nearly half of Zalando's sales, was the worst-performing, with revenue down 5.6% over the quarter.
Apparel was one of the weakest segments for online retailers in Germany in the third quarter, according to ecommerce industry association BEVH.
Gross merchandise volume - a measure of sales on the platform by Zalando and its partners - fell by 2.4% from a year ago. The company lowered its 2023 forecast for gross merchandise volume to between -2% and 1%, down from an outlook for the lower half of the 1% to 7% range.
Faced with tougher competition at lower price points from Shein and other new rivals, Zalando is trying to grow its luxury brand offering, rolling out a new "boutique-style" space for designer brands.
Zalando, which says it is focused on growing profits, stuck to its operating profit outlook for the year. Gross margin for the third quarter fell, however, to 36.7% from 39.1% a year ago due to discounting.
Zalando shares have lost a third of their value since Jan. 1. The company's market value has dropped over the past two years as shoppers, freed from pandemic restrictions, returned to stores and ordered fewer clothes online.



Struggling Gucci Owner’s Shares Soar Over New CEO Reports 

A model presents a creation by the Gucci Fall-Winter 2025/2026 collection during Fashion Week in Milan, Italy, February 25, 2025. (Reuters)
A model presents a creation by the Gucci Fall-Winter 2025/2026 collection during Fashion Week in Milan, Italy, February 25, 2025. (Reuters)
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Struggling Gucci Owner’s Shares Soar Over New CEO Reports 

A model presents a creation by the Gucci Fall-Winter 2025/2026 collection during Fashion Week in Milan, Italy, February 25, 2025. (Reuters)
A model presents a creation by the Gucci Fall-Winter 2025/2026 collection during Fashion Week in Milan, Italy, February 25, 2025. (Reuters)

Shares in Gucci owner Kering jumped Monday over reports that the outgoing boss of French automaker Renault would take over as chief executive of the struggling luxury group.

Renault shares, however, fell following its announcement Sunday that Luca de Meo, 58, would step down on July 15 "to take on new challenges outside the automobile sector" after five years at the helm of the company.

Le Figaro newspaper reported that de Meo would take over at Kering, the French luxury group that owns Gucci, Yves Saint Laurent, Balenciaga and other premium brands.

Kering has struggled to turn things around at Gucci, the Italian fashion house famous for its handbags and which accounts for half of the group's overall sales.

Previous reports have said the group's chief executive Francois-Henri Pinault would stay on as chairman of the group in a management shake-up.

Kering shares rose more than six percent to 183 euros ($212) in morning deals at the Paris stock exchange.

Shares in Renault fell 6.7 percent to 40.10 euros.

Known as a skilled communicator and marketing expert, de Meo is credited with bringing stability to a company that was in turmoil when he took over in 2020.

The automaker was reeling from more than a year of crisis in the wake of the scandal involving Carlos Ghosn, the former head of the Nissan-Renault alliance who fled Japan to avoid trial.

De Meo accelerated the group's shift to electric vehicles and pushed for an upmarket move in an effort to steer the company out of trouble. Renault also owns the Dacia, Alpine, and Lada brands.