Nothing could illustrate the situation on Germany’s retail market better than the dichotomy between legacy brands like Adidas and the online upstart Zalando. Stock traders are currently touting Adidas as the next target for them to short. The company had to close its stores in Germany at the outset of the global pandemic and then suffered serious reputational harm when it applied for rent relief from tax payers despite a war chest of billions in cash. By comparison, the share price of the online fashion retailer Zalando may have slipped 44 percent at point during the worst point of the pandemic crisis, but investors clearly believe in the company’s long-term viability. On March 19, the price for a share in the company could be had for just €27, but it has since done more than just recovering, hitting record levels, including a closing price of €53.40 on May 8. The growth was spurred on by its forecast last week for double digit growth in 2020, an announcement that saw the share gain 12 percent in value. While shopping malls and large retail formats are now opening across Germany, sales are likely to be far slower as consumers continue to come to grips with the fear of shopping in public space. The transition to online retail has been quickened by the coronavirus crisis and Zalando appears set to take full advantage of the trend.
