Zalando posts strong Q3 growth and announces beauty category

Ecommerce giant Zalando increased sales by between 27.5% and 29.5% to €1,064m-€1,081m in Q3 and has revealed it intends to launch a beauty category next year.

The German-based business said it expects to achieve an adjusted EBIT of between €-5m to €5m for the same period as it continues to invest in infrastructure to support its growth.

In the first nine months of 2017 Zalando achieved revenues of €3,145m-€3,162m, growing by 23.5%-24.1% (first nine months 2016: €2,547m, 21.9% growth). Adjusted EBIT for the first nine months is expected to come in at between €97m and €107m giving a margin of 3.1%-3.4%.

CEO Rubin Ritter said the business was continuing with its growth strategy "at full speed" and was winning marketshare. "Our results for the third quarter underline once again that our strong business expansion is driven by ongoing investments into our technology and logistics infrastructure, brand partner proposition and consumer experience."

The new beauty offer will launch next spring and will include cosmetics, skin and hair care, fragrances, tools and accessories. It is will launch for German customers only initially and will be introduced to to other markets in a phased roll-out. Ritter described the move as a "natural step" which reflected the demand of its customers.

To complement the launch it will open an offline beauty concept store in Berlin, which will also be used as an event and knowledge platform for product launches, tutorials and advice from beauty experts. Zalando said it will also be able to "test digital use cases in an offline setting" and get to know the beauty customer even better.

A number of other young fashion etailers have been expanding their interest in beauty. In recent weeks both ASOS and Boohoo have launched own-label cosmetics lines.