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MarketScreener Homepage  >  Equities  >  Xetra  >  Zalando    ZAL   DE000ZAL1111


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Zalando : to push 'sustainable' fashion, cut emissions

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10/30/2019 | 05:33am EST
FILE PHOTO: The logo of fashion retailer Zalando is pictured at the new headquarters in Berlin

BERLIN (Reuters) - Zalando, Europe's biggest online-only fashion retailer, announced plans on Wednesday to cut its emissions of carbon dioxide, eliminate single-use plastics in packaging and sell more shoes and garments made in a sustainable way.

Many fashion players are trying to bolster their environmental credentials as the sector comes under attack for fuelling a throwaway culture.

"The fashion industry is facing sustainability challenges and we know we have been part of the problem. Going forward, our aspiration is to be part of the solution," said Zalando co-Chief Executive Rubin Ritter.

The global production of clothes has doubled since 2002, mainly because people only keep garments half as long, Ritter said, noting that the fashion industry accounts for about 8% of global greenhouse gas emissions and transportation for 14%.

Ritter admitted that Zalando's sustainability push could dent profitability as offsetting carbon had a cost, while ending sales of brands which don't share its values could hit sales, but should be good for business in the long term.

"We see a clear link between acting sustainably and continued commercial success," Ritter said. "We believe that it will be a competitive advantage in the future."

Zalando has seen online searches for "sustainable" fashion jump 66% in the last year, with sales of items it flags as sustainable rising tenfold in the last two years to 260 million euros (£225 million), Ritter said.

Zalando wants to generate 20% of gross merchandise value - sales made on its platform by itself or its partners - from more sustainable products by 2023, about 3-4 billion euros.

"We see a lot of demand for these products," Ritter said.

Zalando said it wanted to be "carbon neutral" in its own operations and all deliveries and returns as of today, including self-operated properties, parcel transportation and packaging.

It switched to over 90% renewable energy at its own buildings this year, is piloting using electric vehicles for deliveries and said it would offset remaining carbon emissions that could not be eliminated in its operations.

Carbon offsetting involves helping to fund a cut in emissions elsewhere, such as through preventing deforestation.

Zalando pledged to design its packaging to minimize waste and eliminate single-use plastics by 2023, noting that its boxes are already made from recycled materials.

By the launch of the 2020 spring/summer collection, its ZIGN private label will be repositioned as a "sustainable" brand and flagged as such online, aiming to meet international standards for social, environmental and animal welfare practices.

(Reporting by Emma Thomasson; Editing by Michelle Martin and Thomas Escritt)

Stocks mentioned in the article
ChangeLast1st jan.
RANDOM LENGTH LUMBER?FUTURES (LBS) - CMG (ELECTRONIC)/C1 1.68% 404.5 End-of-day quote.19.64%
ZALANDO 2.30% 42.69 Delayed Quote.90.24%
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Financials (EUR)
Sales 2019 6 456 M
EBIT 2019 220 M
Net income 2019 86,2 M
Finance 2019 776 M
Yield 2019 -
P/E ratio 2019 126x
P/E ratio 2020 87,6x
EV / Sales2019 1,52x
EV / Sales2020 1,29x
Capitalization 10 617 M
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Mean consensus HOLD
Number of Analysts 33
Average target price 42,90  €
Last Close Price 42,69  €
Spread / Highest target 31,2%
Spread / Average Target 0,49%
Spread / Lowest Target -50,8%
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Robert Gentz Co-Chief Executive Officer
Rubin Ritter Co-Chief Executive Officer
David Schneider Co-Chief Executive Officer
Cristina Stenbeck Chairman-Supervisory Board
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