May 6, 2020 / 7:58 PM / 19 days ago

Germany's Zalando forecasts sales to grow 10-20% in 2020

FILE PHOTO: The logo of fashion retailer Zalando pictured at its new headquarters in Berlin, Germany, April 10, 2019. REUTERS/Hannibal Hanschke

BERLIN (Reuters) - German online fashion retailer Zalando (ZALG.DE) said sales were recovering from an initial hit by coronavirus lockdowns and it expects full-year sales growth of 10-20% and a return to profitability after it posted a first-quarter loss.

Zalando said first-quarter sales rose 10.6% to 1.5 billion euros ($1.62 billion) and it reported an adjusted operating loss of 98.6 million euros, within the range it predicted when it reported preliminary first-quarter results last month.

As the pandemic prompted customers to tighten their belts, Zalando said growth was particularly strong in the offprice segment, with sales up 35%.

Europe’s biggest online only fashion retailer said demand started to recover in April, allowing it to predict that sales and gross merchandise volume (GMV) - sales made by itself or its partners - will grow 10-20% for the full year.

Zalando predicted that its adjusted operating profit will come in at 100-200 million euros, down from 225 million in 2019.

Before the coronavirus pandemic struck in Europe, Zalando had forecast sales growth of 15-20% for 2020, down from 20.3% in 2019, and GMV growth of 20-25%.

To help more brick-and-mortar retailers - many currently closed - sell online, Zalando said it would extend its offer to shops to digitize their assortment to Spain, Sweden and Poland in the third quarter.

Reporting by Emma Thomasson; editing by Grant McCool

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