Consumer sentiment in Europe remains muted but Zalando — one of the region’s largest online fashion retailing platforms — is exploiting every niche it can to capture an even larger share of the European fashion market with its multifaceted “ecosystem strategy,” executives said.
This is why the Berlin-based company unveiled a new five-year partnership with the German national soccer federation, or DFB, Zalando co-chief executive officer David Schröder explained during a conference call about third-quarter results Thursday morning.
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“With our ecosystem strategy, we are extending Zalando reach and relevance beyond fashion into broader lifestyle areas,” he said.
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It would appear to be paying off. Revenues at Zalando rose 26.5 percent in the third quarter to 3.02 billion euros.
The German company’s gross merchandise value, or GMV, increased 21.6 percent to 4.21 billion euros in the three months through September. Zalando sees GMV, which measures how much inventory the platform has moved, as a key indicator.
The double-digit increases were mostly due to Zalando’s midsummer acquisition of another large online retailer based in Germany, About You. This boosted many of Zalando’s key performance indicators.
But even when the About You uplift was taken out, Zalando still had growth. On a pro-forma basis, if one assumed About You had been part of the company during the third quarter last year, then revenues rose by 7.5 percent and GMV by 6.7 percent, Zalando said.
According to local sports magazine Kicker, the new football sponsorship is reported to be worth a mid-double-digit million euro sum annually to the DFB. It makes Zalando one of the football federation’s three main sponsors. The others are Volkswagen and Adidas — although the latter will be replaced by Nike in 2027, in a move said to be worth 100 million euros a year that surprised many Germans.
Zalando will also offer exclusive access to tickets to games, merchandise giveaways and will be selling replica jerseys. That should attract more male customers, who have traditionally been a weaker market for Zalando, Schröder explained.
Zalando has also been partnering with running events around Europe, in the Netherlands, Denmark and Germany.
When asked why the online retailer was focusing more on sports, Schröder reiterated that the platform wants “to expand from fashion into broader lifestyle.”
“Sports is particularly interesting in that regard, not only because it’s a fast-growing online category with double-digit growth rates across the continent … but also because, especially with the younger audience, we see this fusion of styles,” Schröder told WWD. “Sports culture has driven streetwear trends over the past few years.”
For Zalando, the sports segment has been growing faster than its primary fashion sector, with sporting goods’ GMV in the double digits. But this was probably also because the platform was already more mature in the fashion category and didn’t have much room to move there, the executive noted.
Zalando’s data shows that 85 percent of the platform’s customers participate in sporting activities every week.
Zalando is also pushing its business-to-business activities and has brought some big names into its distribution and marketing network over the third quarter. It will start operating continent-wide fulfillment services for the U.K. retailer Marks & Spencer and is already doing the same for another British brand, Next, in 21 markets.
The shopping software Scayle, which came with the purchase of About You, also netted Zalando some new customers: Deichmann, Europe’s largest footwear retailer, and grocery chain Netto, are both using Scayle now.
Thanks to the purchase of About You, other key performance indicators were also positive.
Zalando recorded 61.4 million active customers, an increase of 21.9 percent, in the third quarter and also saw orders rise 18.4 percent to total 68.5 million euros.
The average basket size rose slightly, going from 61 euros per basket to 61.80 euros. However, the number of average orders per customer fell from 4.9 per shopper to 4.8.
Zalando’s adjusted earnings before interest and taxes, or adjusted EBIT, improved to hit 96 million euros in the quarter. However that number excluded acquisition-based expenses and restructuring costs. Without those adjustments, EBIT actually fell 29 percent to 49.1 million euros. In this area, “About You acted as a headwind,” Schröder conceded.
Previously, investors have been worried about Zalando’s EBIT because of the costs involved with this kind of retailing and the EBIT margin in the third quarter remains low, sitting at just 1.6 percent.
Earlier in the year, the online retailer had already adjusted guidance, mostly due to an uncertain economic climate and the impact of that on consumers. This quarter, Zalando confirmed that forecast and Schröder said the fourth quarter had started as expected.
There had been no huge change in consumer sentiment in Europe over past months, he reported, and holiday shopping would happen in a fairly muted macroeconomic environment, with consumers seeking value for money. “Overall, fashion and lifestyle spending is pretty flat,” Schröder said.
Zalando still expects midsingle-digit growth for the entire group in the second half of the year.
About You will boost comparative numbers, and group revenues are predicted to rise between 14 and 17 percent over 2025. For the first nine months of 2025, the company has already recorded growth of 11.4 percent and revenues of 11.82 billion euros.
But Zalando actually expects pro-forma revenue and GMV to only increase somewhere between 4 and 7 percent for the full year. Zalando had previously expected between 4 percent and 9 percent growth for its operations alone, without the addition of About You.
Adjusted EBIT should come in somewhere between 550 million and 600 million euros.
Third-quarter results largely met market expectations and market analysts from the likes of RBC, Goldman Sachs, Deutsche Bank and Warburg Research agreed the company’s guidance was appropriate and results were solid, considering the economic environment.