Zalando says AI is improving output, announces Levi’s partnership

Adjusted earnings before interest and tax (EBIT) were also up by 15.6%, landing at €591m (£511m). 

Part of the revenue growth was due to the acquisition of the German fashion retailer About You. The newly merged company had an EBIT margin of 4.8%, the same as the year before, although Zalando said the margin for the larger brand had increased to 5.3%. 

The company has been on an aggressive push with AI. It said that 90% of product content was now AI-generated, helping it boost its content output by 70%. It credited advanced AI models with improving the precision of real-time customer delivery promises by 22 percentage points, while it added that its development team had increased coding changes by a fifth, thanks to using the latest AI Coding tools. 

Zalando was one of the two European launch partners for Google’s Universal Commerce Protocol and claims that it is the “number one referred fashion platform by conversational AIs.”

Revenues at its B2B business, which includes logistics business Zeos, now exceeded €1bn. UK fashion retailer Next’s partnership with Zeos helped drive a 33% improvement in international online sales, while fulfilment costs were cut by 6.5%. 

Alongside its results, Zalando announced a global partnership with Levi’s. The denim brand will now use Zalando’s shop and marketplace software Scayle as the commerce platform for levi.com across the US, Canada and Europe. 

“The unique data and infrastructure platform we’ve built over 17 years now gives us a massive advantage. We have the richest fashion-specific data in Europe, from billions of customer interactions and unparalleled brand relationships, and the continent’s leading logistics fulfilment network,” said Zalando co-chief executive Robert Gentz. 

Earlier this week, Zalando announced that Emily in Paris star Lily Collins would be its first-ever global brand ambassador. 

The company gave guidance of 12% to 17% revenue growth next year, with adjusted EBIT also increasing to between €660m (£570m) and €740m (£639m). Zalando also announced it was commencing a share buy-back programme of up to €300m (£259m).

“This underscores our confidence in Zalando’s future earnings power and our disciplined approach to capital allocation,” said chief financial officer Anna Dimitrova.