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Reuters Published
November 2, 2025
Europe's biggest online fashion retailer Zalando sees continued pressure on demand for the rest of the year and now expects 2025 sales to decline, the company said as it reported weaker than expected third-quarter revenue.
The multi-brand platform fashion and beauty platform has been hurt by a pullback in online shopping after a pandemic-era boom, a trend that has also bruised other online-only retailers like ASOS and Boohoo.
Zalando now expects 2025 revenue to fall by between 0.5% and 3%, having previously guided for a 1% decline at worst and a 4% gain at best. Third-quarter sales of €2.275 billion ($2.41 billion) missed analysts' estimates and were down 3.2% from the same quarter last year.
An unusually warm September weighed on sales of autumn and winter clothes, Zalando said, exacerbating the impact of weak consumer sentiment. The Germany, Austria, and Switzerland region was the worst-performing, with sales down 5.6% over the quarter.
Apparel has been one of the weakest segments for online retailers in Germany (and beyond), according to e-commerce industry association BEVH. Online apparel sales fell 17.5% in the third quarter compared to the same period last year, BEVH said in a report published last month.
Faced with tougher competition at lower price points from Shein and other new rivals, Zalando is trying to grow its luxury brand offering, rolling out a new "boutique-style" space for designer brands.
While the number of orders fell, Zalando's average basket size increased to €58.9 from €56.2 a year ago, in a sign shoppers are buying bigger-ticket items or that inflation isn’t deterring many from still buying fashion.
Zalando shares have lost a third of their value since January 1. The company's market value has dropped over the past two years as shoppers, freed from pandemic restrictions, returned to stores and ordered fewer clothes online.