Zalando injects 6 million euro into Irish subsidiary to offset 6.3 million loss in FY16

The largest European fashion e-commerce group has to inject 6 million euro into Zalando Ireland as the Irish subsidiary struggled to end the year into the black.

Losses continued to mount at the Irish arm of online fashion retailer Zalando last year as its parent injected a further 6 million euros into the business, reported the ‘Irish Times’ in its weekend edition.

The online retailer’s accounts for its business in Ireland showed that the Irish subsidiary recorded a 6.3 million euro loss last year, up from a 2.3 million euro loss for the previous nine months. The same documents show the parent late last year agreed to convert 6 million euro of loan financing into capital reserves as an additional non-refundable contribution.

The rise in losses at its Irish subsidiary came as administration expenses ballooned to 6.1 million euro, highlighted the local paper.

It’s worth recalling that the group’s Irish unit serves as Zalando’s technology hub, since it opened its R&D centre in Ireland in 2016. Since then, Zalando has been investing heavily into data science and new products, as well as development of other tech applications for the firm.

“We do not view Dublin as a profit centre in accounting terms, but it plays an important role in our strategy. Hence, we are willing to invest and fund the office from Zalando SE – this includes various ways of funding, such as loans or a capital contribution,” the spokesman said in an interview with the ‘Irish Times’.

Europe’s largest online-only fashion retailer, valued at 5.7 billion euro when it went public on the Frankfurt stock exchange in October 2014, focuses on the German, Swiss, and Austrian markets, and operates across 15 European countries with more than 1,500 brands.