Zalando invests in creativity and technology to boost dipping revenues

European online retailer, Zalando, has reported an adjusted third-quarter EBIT of £20.2 million (€23.2 million), an increase of 72% compared with last year.

Adjusted EBIT increased to £20.2 million (€23.2 million) from £11.7 million (€13.5 million) the year prior thanks to lower fulfilment costs.

However, the company’s gross merchandise volume (GMV) dropped 2.4% to £2.7 billion (€3.2 billion). This resulted in revenues falling by 3.2% to £2 billion (€2.3 billion) during the third quarter amid a challenging macroeconomic environment of low consumer sentiment and declining online sales.

To ensure future growth, the company has formulated strategic initiatives such as new storytelling formats, introducing a luxury boutique-style space in the Fashion Store and growing the company’s logistical offering.

Last month, the company launched the B2B brand ZEOS, short for Zalando E-commerce Operating System, enabling fashion brands and retailers to manage their multi-channel business within one platform.

Dr. Sandra Dembeck, CFO at Zalando, commented: "Storytelling, logistics and technology are key to boosting our future growth. Our healthy balance sheet gives us the financial flexibility to make these strategic investments.

"On top of that, our financial discipline meant that we were able to deliver on another quarter of improved profitability."

Looking ahead, Zalando confirmed its full-year guidance with Adjusted EBIT still expected to sit between £261 million (€300 million) and £305 million (€350 million). GMV is now expected to be between -2% and 1% and revenue to be  between -3% and -0.5%.