Zalando unveiled a new advertising campaign, website, packaging and apps on Thursday - and gave a deeper insight than ever before into the inner workings of Europe's biggest online fashion player as it prepares for a likely listing. At the German retailer's first-ever news conference, in a converted industrial building in trendy east Berlin, its three management board members said the start-up launched in a basement just six years ago was now growing up.
"Zalando is entering a new phase," said co-founder David Schneider. "Today we have one of the largest and most sophisticated warehouses across Europe. We could easily double our sales volume and not see such a problem." Zalando is set to announce in the first half of September the listing of a 15 percent stake that could value the company at about 6 billion euros ($7.9 billion) in one of Germany's biggest tech flotations for years, sources have told Reuters.
The Zalando team declined to comment on speculation of an initial public offering (IPO) on Thursday, with board member Ruben Ritter sticking to the standard line that a listing remained an option for the company. An IPO would come amid a flurry of e-commerce flotations this year, with Chinese giant Alibaba set to list soon as well as German venture capital firm Rocket Internet which helped launch Zalando and many other start-ups.
Earlier on Thursday Zalando, in which Sweden's Kinnevik is the biggest investor with a 36 percent stake, said first-half sales rose 29.5 percent to 1.047 billion euros and it made its first-ever operating profit. It earnings before interest and tax (EBIT) of 12 million euros compared with an operating loss of 72 million a year ago. Ritter said the turn to profit had come from efficiency improvements across the board, including in marketing, new automated logistics facilities and the need for fewer markdowns due to more predictable weather in recent months.
He said Zalando was now one of the biggest employers in the German capital - long plagued by high unemployment. The company has a total staff of 7,000 people, with an average age of just 29, and about two-thirds of them on unlimited contracts. Zalando, which began selling shoes in 2008, now ships 1,500 brands to customers in 15 countries, gaining widespread visibility with its "scream for joy" slogan and ads showing delighted customers tearing open Zalando packages. Gentz said the firm planned to focus more on fashion in a new advert that shows a woman carrying a Zalando package storming into a staid catwalk show where everybody is clad in black and getting everybody out of their seats to dance.