09. December 2020 | 06:10 CET
Zalando, RYU Apparel, Shopify: Lockdown winnings beckon
Is hard-lockdown coming, or is it not? After light-lockdown, the selective "deepenings", and the holiday relaxations, the classic lockdown is now back in Germany. In addition to gastronomy and leisure facilities, the retail sector could also be hit again. In some federal states, this could even occur before the Christmas holidays. What leaves the sweat of fear on the foreheads of traditional businesses could generate sizable revenues for digital business models, and this development is shown, for example, by the performance of the Zalando share. For years, the share price rose moderately - but since March 2020, the value has been through the roof.
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ISIN: CA74979J4072 , DE000ZAL1111 , CA82509L1076
Zalando faces a new lockdown fantasy
In the first half of 2020 alone, sales climbed by 20%, and the traditionally relatively narrow profit rose significantly to more than EUR 36 million. The business development at Zalando shows that the trend towards online trading was unbroken even after the end of the first lockdown in Germany - customers just kept on clicking. As this development is bringing many traditional stores to the brink of their existence, Zalando has launched a partner program and offers retailers its digital platform.
Customers can order online, but still from the retailer on the corner. The stock came back a little last month. Given the new lockdown perspective, this could have been the consolidation that opens the way for a new rise.
RYU Apparel: A streetwear share goes digital
The Canadian Company RYU Apparel operates a hybrid model of face-to-face and online shopping. The brand is focused on fitness and streetwear and intends to aggressively pursue its growth path in the coming months and years: By 2024, the Company wants to grow by 49% each year and eventually achieve sales of CAD 84 million. To achieve this, all processes, including warehousing, are to be optimized and realigned. The use of the Shopify software also has a significant influence on this. Medium-sized companies, in particular, praise the software and point to good experiences.
Parallel to the internal processes, RYU also wants to break new ground in marketing in the future. Even more customers should now become aware of the already appealing quality. To achieve this, RYU Apparel recently announced a cooperation with a company that implements product placements in films and series. In contrast to traditional marketing, great effects can be achieved with just a few placements - imagine a striking serial character regularly slipping into RYU's latest collection. Although this is still future dreams, CEO Cesare Fazari, who has only been in office for a few months, has already achieved a great deal at RYU. The sell-off of the share seems to have stopped, and a turnaround is possible - last month alone, the share price climbed by more than 25%.
Shopify turns every store into an online store
The share of the shopping software high-flyer Shopify is quite different: the price of just under EUR 900 per share speaks a clear language. Over a year, the share price rose by 171%. Just recently, the Company reported that Shopify customers generated USD 5.1 billion in sales between Black Friday and Cyber Monday, an increase of 76% over the same period last year. Shopify also pointed out that this year, customers were in a shopping mood earlier than before.
Shopify describes itself as an all-inclusive store system: customers can set up a store without programming skills, benefit from the fail-safe infrastructure, use payment methods from credit cards to Bitcoin or integrate sales channels such as Facebook or Instagram with just a few clicks. Even topics such as German e-commerce law or the GDPR are no longer a significant challenge for Shopify users. Stores from all over the world now use the software. Shopify is thus a supplier of the megatrend "digitization of trade". However, the stock has long since ceased to be an insider tip.
Anyone can invest in the digitization of retail
Whether Zalando, RYU Apparel or Shopify: all three shares benefit from the zeitgeist and should not lose their appeal even after the pandemic. While Zalando is an established player and Shopify something like the general store in the middle of the gold rush, RYU, with a market capitalization of just under EUR 15 million, offers a turnaround story for speculators. The digitization of retail gives investors a wide range of opportunities depending on their individual risk appetite.