Zalando soars again in H1, launches premium benefits programme

Zalando continued its relentless rise in the first half as the company’s preliminary figures showed that revenues surged. And the firm also announced a new paid-for membership programme with special benefits for premium members.

The programme, called Zalando Zet, is designed to draw consumers closer into the Zalando universe and get them spending more, a strategy that’s a cornerstone of the growth strategies of pureplay e-tail giants globally.

It offers customised premium services like faster delivery, pick-up of returns on demand, as well as additional benefits such as personal fashion advice or early access to sales.

In the first phase, customers in four German cities (Berlin, Leipzig, Frankfurt, Hanover) will be able to test the service for three months, after which they can become members for €19 per year.

The move adds to Zalando’s existing offer, which includes the ability to try goods on at home before buying.

It will be interesting to see how Zet positively impacts growth. But for now, the company has no problems on the growth front. In H1 its preliminary figures showed revenue rose between 21% and 22% to reach €2.071 billion to €2.089 billion.

And the company’s adjusted pre-tax profit is expected to come in at between €100 million and € 106 million, although the margin is lower, at around 4.8% to 5.1%, compared to 5.9% a year ago.

Q2 looked a little slower revenue-wise than the half as a whole with revenues up between 19% and 21% to €1.091 billion to €1.109 billion. Pre-tax profit for the three months is expected to be around €80 million to €86 million and while the margin is, again, lower than the year-ago period, at between 7.3% and 7.8%, it’s actually higher than the first half in total.

It blamed its Q2 slowdown on public holidays and warehouse constraints with new facilities yet to operate at capacity. And as is often the case in these situations, its shares fell sharply, even thoough the Q2 issues don't look to be long-term ones.

Co-CEO Rubin Ritter said, unsurprisingly, that the company is “pleased with the performance” and said it continues to invest in order to meet its ambitious growth targets for the full year and beyond. He added: “In the fast-growing online segment, we continue to outperform the market and deliver on our 20% to 25% growth corridor. Our investments, for example in our fulfilment capabilities and the launch of our membership programme Zalando Zet, are the cornerstones for future growth.”