Zalando Sees Growth Helped by Loyalty Programme, Fewer Discounts

Zalando SE, the online fashion platform, forecast rising sales and earnings for this year as it offers fewer discounts and rewards customer loyalty.

Revenue will likely grow between 4 percent to 9 percent, the company said Thursday as it reported full-year results. Earnings before interest and taxes may rise to as much as €590 million ($637 million). The stock rose as much as 3.5 percent in early Frankfurt trading.

Zalando is luring more clients thanks to brand partnerships that include Versace menswear, On running and Diane von Furstenberg. Now the roll-out of a loyalty program will be key, analysts said.

The plan rewards frequent shoppers with free premium deliveries and access to new releases.

The number of active customers reached an all-time high of 51.8 million at the end of last year. Zalando, which sells multiple brands including Adidas sneakers and Levi’s jeans, is expanding to new markets — Portugal, Greece and Bulgaria — and its logistics arm ZEOS will fulfill online orders for UK-based retailer Next Plc for most of continental Europe.

The company is also working to reduce the number of packages that get returned — a result of people buying clothes in multiple sizes to try on at home. Zalando has launched virtual fitting rooms that allow customers to see items on their individual body shape.

The guidance does not account for effects from the planned acquisition of About You Holding SE, which is expected to close in the summer.

By Sonja Wind

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