Zalando Sees Dip In Sales For The First Time Since Founding

German fashion retailer Zalando posted a decline in sales for the first time since it was founded in 2008.

The company’s Q1 sales declined by 1.5% to $2.3 billion after registering a 46.8% increase in the same quarter last year. The decline in sales resulted in an operating loss of nearly $54.6 million, compared to a year-earlier profit of $97.6 million.

“The main issue is that people just aren’t into buying fashion,” said Co-Chief Executive Officer Robert Gentz, pointing to high inflation and the war in Ukraine as key deterrents impacting the company’s sales.

Looking ahead, the company is expecting sales growth in 2022 at the lower end of its previously forecasted range of 12% to 19%, and adjusted earnings before interests and taxes at the lower end of the expected range of $451 million to $536 million, Reuters reported.

“We believe in the strength of our business model and are taking further actions to improve our results,” said Gentz, adding that the company expects significant business growth in the second half of the year.

Besides inflation and the ongoing war, Zalando’s business is also being impacted by consumers’ return to shopping in physical stores. As a result, the company only slightly increased its number of customers, compared to 48.8 million in the previous quarter.

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Originally published at https://retailbum.com on May 9, 2022.