Zalando, the German online fashion retailer, sent shares in UK rivals boohoo and ASOS tumbling after a warning that it is no longer benefitting from rebounding consumer confidence.
Guidance for the fiscal year was cut by Zalando, with revenue now expected to grow anywhere between 0% and 3% to £8.92bn- £9.18bn, compared to predictions earlier in the year of 12% to 19% growth.
Gross merchandise volume (GMV) is also expected to grow somewhere between 3% and 7% to £12.7bn and £13.3bn.
For the second quarter of 2022, the retailer expects GMV growth, revenue growth and underlying earnings all to be significantly below analyst estimates.
In an attempt to combat some of the issues, Zalando said it will be introducing a minimum order value across 15 additional markets.
“While this new environment is creating a negative impact on our financial performance, our strategy and long-term goals are unchanged,” said co-chief executive Robert Gentz
“Our vision remains to be the starting point for fashion in Europe.”
“There are many untapped opportunities in the fashion market that we can capture and are committed to change the industry for the better.”
ASOS fell 1.7% and boohoo 1.4%.