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Zalando is getting closer to making a profit

After improving the efficiency of its warehouses, Zalando saw its sale rose 35 percent to 501 million euros in the first three months of this year. This growth is slightly smaller than the 36 percent growth it recorded in the previous quarter. Rumors have it that Zalando is planning a stock market listing in the third quarter.

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Even if Zalando doesn’t quite reach the break even point in 2014, it should take a significant step towards it, Rubin Ritter, a member of the management board, said at a media conference call.  Zalando’s margin improved significantly year-on-year, but it remains negative in the first months of this year, due to seasonality and continued investment. Thanks to higher fulfilment productivity, increased marketing efficiency and a good start into the spring/summer season the margin improved. Zalando’s net loss for the first quarter is something the company did not state.

Now Zalando is considering to go public later this year, making a profit after all those years is something Zalando would be happy about as potential shareholders would love to know the online fashion retailer is able to make some serious money in the future. The last couple of years the German company spent hundreds of millions of euros on marketing to establish its brand, something that they gathered to achieve quite fast.

And it´s more a question of “when” instead of “if” when it comes to Zalando going public. It changed its legal structure to one that´s typically used by German listed companies and the online fashion retailer has picked several banks to advise them.

Zalando started selling shoes online in Germany just five years ago, and now it shows 1,500 different brands to customers in 15 countries. In Europe, it has some major competition from pure online retailer ASOS, but also from fashion brands like H&M and Inditex who are expanding their own ecommerce offerings.

Zalando revenues Q1 2014

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