German multi-brand retailer Zalando announced significant layoffs as it braces for slower sales and tighter financial conditions. In an internal note to staff, the company disclosed plans for several hundred job cuts across various departments to reduce costs and improve flexibility. The message, signed by the group’s co-CEOs Robert Genz and David Schneider, underscored the impact of China’s growth and the challenges facing fashion and retail in a competitive market. The plan outlines a program that will eliminate a number of general roles across multiple teams. In recent years, Zalando’s divisions expanded rapidly, adding layers of complexity that slowed decision-making. The leadership emphasized that this step is intended to streamline operations and move faster, though it did not specify the exact number of positions affected.
While the measure will spare some areas from cuts, it will reach into management levels as well. The statement notes that the final impact remains unclear for all functions, but it confirms that roles in logistics centers, customer service, and outlet stores, as well as Zalando Studios, will not be affected. The exclusion of outlet stores suggests caution about the speed of implementation and inventory-management concerns. High inventory levels often precede challenging dynamics, including revenue pressure and reduced viability.
Recent figures show Zalando closing the quarter with revenue of 2,349.1 million euros, up 2.9 percent from the prior year, but reporting a net loss of 35.4 million euros, a fourth consecutive year of red numbers. In the previous quarter, revenue fell 4 percent while the company posted a modest profit. Earlier in the year, Zalando issued a profit warning, citing a deteriorating macroeconomic environment and weak consumer confidence. Management projected only modest growth in sales, trimming expectations from earlier ranges.
shine effect
The rise of online-only fashion platforms did not, on its own, stabilize the broader retail landscape, particularly for companies focused primarily on e-commerce. Yet one player consistently draws attention: Shein, a global giant that is prompting strategic reconsideration across the fashion sector.
According to projections shared with potential investors ahead of its public listing, Shein aims to double annual revenue by 2025, reaching about 58.5 billion dollars. The plan positions the company, at least on paper, to surpass the current combined revenue of major peers. Financial media outlets have reported similar growth ambitions, reflecting a broader trend toward rapid scale in online fashion.
In 2022, Shein reported revenue around 22.7 billion dollars, falling short of some internal targets yet showing strong year-over-year growth relative to many traditional retailers. The group posted a net profit near 700 million dollars for that year, marking a fourth consecutive year in positive territory, though down from 2021’s performance. Looking ahead to 2025, Shein aims to lift profitability significantly, targeting a profit level of roughly 7.5 billion dollars, a tenfold increase from 2022 figures.