According to preliminary and unaudited results, Zalando recorded an adjusted earnings before interest and taxes (EBIT) of between minus 90 to minus 110 million euros in the first quarter (Q1) of 2020.
"It was the worst quarter since our IPO," commented Zalando co-CEO Rubin Ritter. But he stressed that the company could avoid laying off employees or apply for additional government state loans during the coronavirus crisis.
With 250 million euros, most cost would be cut in marketing and overhead, according to Zalando. Together with a reduced capital expenditure of around 100 million euros, the cost saving measures would "ensure continued financial health."
In order to "support fashion brands and retailers during the coronavirus crisis," Zalando had introduced several new initiatives that would allow "partners to connect more easily with the Zalando platform."
"For the fashion industry, the time to go online is now, and we can make a difference by supporting our partners to grow their business on our platform," said Ritter. As of March, Zalando recorded a customer base of 32 million active customers, increasing by 17 percent year-on-year.
As a consequence of social distancing measures that were implemented across Europe, Zalando recorded a "significant decrease" in customer demand after strong growth in January and February this year.
In the last three weeks of March, total gross merchandise volume (GMV) at Zalando declined by 8 percent year-over-year. During the entire first quarter, Zalando had still managed to grow its volumes by around 14 percent to around 2 billion euros.
"We look back at a challenging quarter," concluded Zalando CFO David Schroeder. "Nevertheless, we have managed to grow our business, and the first weeks of April make us optimistic for the second quarter," Schroeder added. (1 euro = 1.09 U.S. dollars)
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