Surprise recovery boosts online fashion retailer Zalando amid booming demand in Europe

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Online retailer Zalando expects profits of up to £8.5m for the first three months of the year


Surprise recovery boosts online fashion retailer Zalando amid booming demand in Europe

Online retailer Zalando expects profits of up to £8.5m for the first three months of the year

Online retailer Zalando is set to bag an unexpected profit amid booming demand in Europe.

The firm, which is Europe’s biggest online-only fashion retailer, expects profits of up to £8.5million for the first three months of the year.

Analysts had been expecting a loss of £8.5million.

Shares in the Frankfurt-listed company jumped 10.6 per cent, or €3.98, to €41.56.

Zalando normally makes a loss during the period due to it selling off stock at a lower price after Christmas.

Adam Tomlinson, analyst at Liberum, said: ‘This is a positive short-term development. 

It has built an infrastructure uniquely placed to fend off competition and has a logistics network that is looking increasingly superior to Amazon.’

Zalando sells more than 1,900 brands including Nike, Ralph Lauren, Adidas and Levi’s.

It has struggled recently amid fierce competition and heavy discounting among online rivals.

Meanwhile, profits have been under pressure as it piles investment into logistics and technology to improve its online delivery.

Zalando is trying to grow profitability by charging brands a commission to sell through its website rather than buying and selling products itself.

David Schroder, chief financial officer, said: ‘We are pleased with our performance in the quarter.’

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