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Online retailer: If the shoe fits, please keep it

German-based online retailer Zalando is dealing with a huge number of returned goods, with four out of five shoe sales being sent back – and 65 percent of women’s jeans rejected – putting stress on the company’s bottom line.

Online retailer: If the shoe fits, please keep it
Photo: DPA

Although retail experts have long argued that you can’t sell shoes online, Zalando was determined to show them wrong with slogans that told customers to send back whatever failed to make them cry out loud with happiness.

But it seems customers are taking Zalando for its word and most of the shoes ordered end up back at the warehouse, industry insiders told the Süddeutsche Zeitung newspaper. So despite strong sales, the company has yet to make any money, the paper said on Wednesday.

The company refused to say how it has been affected by returns, which retail sources say is common, but an industry insider said Zalando had “completely underestimated” the return factor, though it has made efforts, by changing its advertising, to get things under control.

Returns are a big problem for the online retail industry, the paper said. They cost time and money.

Yet to date no one has complained about the “buy, try and return” mentality of many Germans, according to the German E-Commerce and Distance Selling Trade Association (BVH).

While it will never be possible to weed out mean-minded shoppers who buy loads of stuff to try on, knowing they will return most of it, or others who buy a fancy dress for a special occasion, wear it and then return it as “unworn”, retail experts say such customers are only a minority.

The paper noted that the French are much more cautious about returns because they have to pay for their online purchases upfront. Only around 10 percent of goods are returned in France, retail expert Thilo Bobrowski of the consulting firm SMP told the paper.

In Germany people only pay after they have received the goods and the invoice.

In the meantime, the old slogan: if the shoe fits, wear it, is not what Zalando wants. A better motto for the online retailer would be: if the shoe fits, please keep it.

The Local/mw

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ENVIRONMENT

Sweden’s SSAB to build €4.5bn green steel plant in Luleå 

The Swedish steel giant SSAB has announced plans to build a new steel plant in Luleå for 52 billion kronor (€4.5 billion), with the new plant expected to produce 2.5 million tons of steel a year from 2028.

Sweden's SSAB to build €4.5bn green steel plant in Luleå 

“The transformation of Luleå is a major step on our journey to fossil-free steel production,” the company’s chief executive, Martin Lindqvist, said in a press release. “We will remove seven percent of Sweden’s carbon dioxide emissions, strengthen our competitiveness and secure jobs with the most cost-effective and sustainable sheet metal production in Europe.”

The new mini-mill, which is expected to start production at the end of 2028 and to hit full capacity in 2029, will include two electric arc furnaces, advanced secondary metallurgy, a direct strip rolling mill to produce SSABs specialty products, and a cold rolling complex to develop premium products for the transport industry.

It will be fed partly from hydrogen reduced iron ore produced at the HYBRIT joint venture in Gälliväre and partly with scrap steel. The company hopes to receive its environemntal permits by the end of 2024.

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The announcement comes just one week after SSAB revealed that it was seeking $500m in funding from the US government to develop a second HYBRIT manufacturing facility, using green hydrogen instead of fossil fuels to produce direct reduced iron and steel.

The company said it also hoped to expand capacity at SSAB’s steel mill in Montpelier, Iowa. 

The two new investment announcements strengthen the company’s claim to be the global pioneer in fossil-free steel.

It produced the world’s first sponge iron made with hydrogen instead of coke at its Hybrit pilot plant in Luleå in 2021. Gälliväre was chosen that same year as the site for the world’s first industrial scale plant using the technology. 

In 2023, SSAB announced it would transform its steel mill in Oxelösund to fossil-free production.

The company’s Raahe mill in Finland, which currently has new most advanced equipment, will be the last of the company’s big plants to shift away from blast furnaces. 

The steel industry currently produces 7 percent of the world’s carbon dioxide emissions, and shifting to hydrogen reduced steel and closing blast furnaces will reduce Sweden’s carbon emissions by 10 per cent and Finland’s by 7 per cent.

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