Zalando’s €10.3B revenue and About You’s €1.9B combine into a €12B fashion leader. The group’s 1.75% EBIT margin highlights profitability challenges. With global competition from Shein, they aim for 6-8% EBIT by 2028.
Zalando: Generated €10.3B in revenue and €184.6M EBIT in 2022, achieving a 1.8% EBIT margin.
About You: A mobile-first platform with €1.9B revenue but a negative EBIT margin in 2023.
Combined: A group with €12B revenue but an EBIT margin under 2%, highlighting the urgent need for synergies to enhance profitability.
This merger leverages Zalando’s scale and About You’s influencer-driven appeal to strengthen their market position.
B2C Strategy: Maintain separate apps tailored to distinct audiences. Zalando focuses on premium, localized shopping, while About You appeals to a younger, trend-driven demographic.
B2B Expansion: About You’s SCAYLE platform enhances Zalando’s ZEOS tools, creating scalable enterprise solutions and operational efficiencies.
Despite its €12B revenue, the group remains significantly smaller than Shein, whose GMV is double at €45.
Shein’s ultra-fast fashion model and global logistics efficiency.A massive gap in speed and reach compared to Shein’s content-driven strategy.
To close the gap, Zalando and About You must accelerate innovation, expand logistics, and enhance content offerings to meet consumer demand more effectively.
Current (2023, pro-forma combined): Profitability is the group’s biggest challenge, with an initial EBIT margin of just 1.75%. Achieving 1% EBIT margin improvement through synergies is expected.
Mid-term (2028): Targeting 6-8% EBIT margin by improving potentially About You’s profitability and addressing Group inefficiencies.
Long-term: The ambitious goal of a 10-13% EBIT margin seems overly optimistic given current financial realities.
Can Zalando and About You challenge Shein's dominance?
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