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IPO in October? Zalando Reports First-Ever Operating Profit in Q2

By David Knight |

German e-commerce giant Zalando has posted its first ever operating profit in Q2 of 2014 as rumours of an IPO later this year refuse to go away. The Berlin-based company said that in 2014 as a whole, its EBIT – earnings before interest and taxes – have hit break even on sales of €1.02 to 1.06 billion, compared to a loss of 9 percent in the first six months of last year.

In a release, the company said the upswing in its results was due to improvements in key cost areas including sales, logistics and marketing.

“The development in the second quarter is very positive, as we can list both sustained strong growth and a strong improvement in the margin,” said Rubin Ritter, a member of the Zalando board.

“Based on this development, we are committed to our goal of making a decisive step towards EBIT break-even at the group level in the 2014 financial year, even if we will possibly not break even overall.”

The Zalando group – which was founded in 2008 and backed by Rocket Internet, and is now 37 percent owned by Swedish investment firm Kinnevik – saw total sales of between €520 and €560 million in Q2 2014, up from €437m in the same period las year.

Although co-founder Robert Gentz told a Berlin conference in May that no decision had been taken on whether to IPO or not, rumours that Zalando, which is currently active in 14 countries, is indeed planning to go public have been swirling all year. According to Reuters, the IPO is set to go ahead in October.