German multi-brand ‘online’ firm Zalando announced hundreds of layoffs waist that can take on future challenges as a result of slowdown in sales and lack of accounting. In a statement to staff, the company announced that it is preparing “several hundred” layoffs in different departments to cut costs and “gain flexibility.” The statement signed by the group’s co-CEOs Robert Genz and David Schneider is an example of the effects of China’s growth. shein why fashion is in the retail industry: “We’ve decided to launch a program that will remove a few hundred general functions from many of our team. In recent years, our company’s divisions have expanded a lot and we’ve added some degrees of complexity to our organization, which has impacted our ability to move quickly. This is for you, as we’ve talked about it often over the past year.” There will be no new news. Since then, we’ve made a lot of progress with our slowdown in hiring in recent months and our efforts to simplify our organization”, they explain to staff, but without specifying how many hundreds of employees will lose their jobs.
Although the measure will avoid cuts in some areas, it will also affect the management level. Details of the statement, “We are not clear on the impact in all areas, but we do know that positions in logistics centers, customer service and outlet stores, as well as Zalando Studios, will not be affected.” The exclusion of ‘outlet’ stores is indicative of distrust at the speed with which the recipe takes effect. High inventory levels are always the beginning of a complex situation, lots of sales, and compromised viability.
According to the latest available data, Zalando closed the third quarter with a turnover of 2,349.1 million Euros, an increase of 2.9% compared to the previous year, and a loss of 35.4 million Euros, four times higher than the previous year. In the second quarter, the company reduced its revenue by 4% and made a profit of only 14 million euros. The company had already launched a “profit warning” in the middle of the year, citing “the macroeconomic situation has deteriorated and consumer confidence has plummeted.” In sales, the company expects a maximum growth of 3% compared to the previously estimated 12% to 19% range.
shine effect
The increase in ‘online’ sales of the epidemic was not enough to strengthen the business situation of companies focused only on electronic commerce. But there is one exception, the giant Shein raises serious doubts in the fashion industry and forces strategic rethinking.
Not for the less. According to the growth plan the company presented to potential investors before it went public, Shein expects to double its turnover by 2025 to reach $58.5 billion in annual sales and exceed the current joint revenue of Inditex and H&M. and “Financial Times” had access. And all indications show that these projections are achievable. Also in Spain.
In 2022, Shein had a turnover of $22.7 billion, below the forecast for sales of $24 billion. That’s 41% annual growth compared to the 50% predicted by the group, but it outpaces H&M in revenue.
The group’s profit totaled $700 million last year, marking its fourth consecutive year in black numbers. The figure represents a 36% decrease compared to the net result for 2021. Looking to 2025, Shein plans to increase its profitability to reach a profit of $7,500 million, ten times the 2022 figure.