* Sales up as much as 28 percent in Q2 vs 35 pct in Q1
* Sees future sales growth at similar level as Q2
* Reiterates hopes to come close to break-even in 2014
* Shares in investor Kinnevik up 6 percent
(Adds CEO, analyst comments, updates share price)
By Mia Shanley and Harro Ten Wolde
STOCKHOLM/FRANKFURT, July 18 Zalando, Europe's
biggest specialist online fashion retailer, has achieved its
first-ever profitable quarter, it said on Friday, giving it
greater momentum for a possible stock market listing this year.
Zalando, whose sales surpass rivals such as Britain's ASOS
Plc, said progress towards break-even in the first
quarter had accelerated, leading to a profitable second quarter.
"You see very clearly in the first half that we are on track
to getting there," Rubin Ritter, a member of Zalando's
management board, told Reuters, though he gave no precise
He declined to forecast if the company, which sells brands
such as Jack & Jones and Diesel, would be profitable in 2015 as
a whole, but said the company was making significant progress
and gaining market share.
The Berlin-based company, which began selling shoes in
Germany in 2008 and now ships 1,500 different brands to
customers in 15 countries, is considering a stock market
flotation in October, people familiar with the transaction have
Zalando's trading update helped lift shares in Swedish
investment firm Kinnevik, which has a 36 percent
stake in the company. Kinnevik shares were up 6 percent by 1021
GMT, outperforming a Stockholm blue-chip bourse which
was 0.5 percent higher.
Zalando, whose German website features everything from Crocs
and stilettos to summer dresses and leather jackets, said the
successful international rollout of its mobile app had helped
lift mobile traffic in the quarter, while its regular customer
base was spending more than before.
Purchases via mobile devices now make up 41 percent its
Figures from Kinnevik value the company at $4.9 billion, but
some analysts have suggested it could be worth as much as $9
Zalando has said a listing is a possibility but Ritter
declined to comment on reports that it could be planned for
Lorenzo Grabau, CEO of Kinnevik, which reported quarterly
earnings on Friday, told Reuters a listing would be a "natural
evolution" for any of its assets but would not comment on
whether Zalando could go public this year.
Sources have said Zalando would probably only list a stake
of between 10 and 15 percent, raising less than 1 billion euros
($1.4 billion), partly because some of the company's investors
would not want to divest their holdings.
Zalando also reported second-quarter sales of between 520
million euros and 560 million, representing 28 percent growth at
the top end compared with 35 percent in the first quarter.
Ritter said the company was moving from a phase of "hyper-
growth" to more "sustainable growth."
"We are still growing significantly above 20 percent and
obviously it's going to continue to be our ambition to grow
significantly faster than the market - but not at 50 percent,"
Over the short to medium term, he said the company aimed for
a similar growth rate as it had in the second quarter.
Zalando has no plans to expand into new markets this year
but Ritter said there were plenty of places where Zalando could
"I think there are interesting opportunities in eastern
Europe," Ritter said. "Some are also left in western Europe,
like Ireland. There also might be interesting opportunities
outside Europe at some point."
Kinnevik has broadened its shareholder base in the past
year, attracting more overseas investors seeking to gain
exposure to its e-commerce portfolio.
It said on Friday that marketplaces and e-commerce
investments now made up almost 40 percent of its overall
portfolio, while its telecoms investments had shrunk to 50
Grabau said this shift would likely continue due to the fast
pace of growth in its e-commerce businesses. Kinnevik also plans
to make further investments in e-commerce and in digital
financial services, in the second half of the year.
($1 = 0.7396 Euros)
($1 = 6.8317 Swedish Crowns)
($1 = 0.5849 British Pounds)
(Additional reporting by Kirsti Knolle; Editing by Jane
Merriman and David Holmes)