A Polish company – LPP Logistics – to launch its first foreign distribution center in Romania

LPP Logistics is planning to launch a new distribution centre in Romania, with an area of 65,000 square meters. The 10-year agreement signed by the Polish logistics operator is for the lease of a facility in Bolintin-Deal, located 50 km west of Bucharest. This is the second warehouse facility managed by the company in the Romanian market, which has become one of the key regions in terms of growth potential for LPP Group. The strategic location of the new investment will allow the company to service 450 stores of LPP clothing brands in Romania, as well as Bulgaria, Hungary, Croatia, North Macedonia, Serbia, and Greece. The state-of-the-art warehousing solutions applied in the distribution centre will significantly optimize costs and delivery times, as well as contribute to a convenient operation of the warehouse, which will also act as a cross dock hub for some of the deliveries from Poland.

LPP Logistics’ new investment in the Romanian market is the Polish operator’s response to the growing importance of efficient logistics in the entire supply chain of LPP Group. LPP Logistics currently manages the Group’s warehousing facilities with a total area of nearly 460,000 square meters. The center, leased by LPP Logistics under a 10-year contract, will be the second – after the Fulfillment Centre launched in 2019 – warehouse facility in the Romanian market and at the same time the first foreign distribution centre in the company’s portfolio. Once operations commence in the Bolintin-Deal municipality, the total warehouse space managed by LPP Logistics will increase to 524,000 square metres.

The choice of the location, located 50 km outside Bucharest, is of strategic importance to LPP Group’s business plans backed by LPP Logistics. Development-wise, after the withdrawal from Russia, it is the western and southern parts of Europe that have become the direction of the Polish clothing manufacturer’s fashion brand sales network. The 65,000-square-meter distribution centre will be dedicated to handling stationary stores and deliveries of goods to regions with a total population of nearly 59m people. It will allow efficient handling of deliveries to 450 LPP brand stores located in Romania, as well as in neighboring Southern European countries, i.e. Bulgaria, Hungary, Croatia, North Macedonia, Serbia, and Greece.

–  The Romanian economy is currently one of the fastest growing in the entire CEE region, and the Romanian market has remained one of the key ones in terms of LPP’s business development for several years now. In just 2.5 years, the number of LPP brand stores in this country has doubled – from 59 at the end of 2019 to 118 at the end of the first half of 2022. Taking this into account, the decision to lease a new warehouse facility in Romania to service the LPP sales network was a natural direction for us. This will be our second warehouse facility in the country, so we are confident that our knowledge of the market and local conditions will allow us to further boost our potential as a logistics operator in the regionemphasizes Sebastian Sołtys, vice-president of LPP Logistics.

By gradually improving logistics processes, LPP Logistics is introducing state-of-the-art solutions in its facilities, including projects based on artificial intelligence algorithms.

Operations at the new distribution center will be supported by, among other things, a 140-meter-long automatic sorter, which will allow for sorting goods for as many as 450 stationary stores simultaneously. The device is a unique solution developed by a team of engineers together with a Dutch supplier. Thanks to the special pneumatic distributors used, it was possible to maximize the number of goods drop places per occupied area of the designed sorter. Another great advantage is the very quiet mode of operation of the device – explains Sebastian Sołtys.

The transport of packed boxes, in turn, will be handled by an automatic conveyor line with a length of more than 1 km and a capacity of 2,000 boxes per hour. The entire system will be integrated with equipment such as box folding and sealing machines, label applicators and volumetric gates, among others. In addition to the sorter and conveyor line, the centre will be equipped with a modern fleet of dozens of carts.

Not only does the use of modern technologies in LPP Logistics’ warehouses optimise processes thus ensuring efficiency, transparency of processes and high productivity. All the applied solutions are also intended to support and provide ergonomics for nearly 280 operational employees of various specialties, who will be employed in the new distribution centre. The recruitment process for the new facility will begin in the first quarter, and the management team will be given the opportunity to receive training at LPP Logistics’ distribution center in Poland.

– Warehouse automation and unique tailor-made solutions for LPP Group are key elements of our strategy. Romania remains one of the most attractive and well-connected markets for us, where the fashion industry offers huge growth potential. Forecasts for the coming years related to sales in this sector look promising. Bearing this in mind, we are gradually pursuing our goal of building and developing a supply chain management company based on the highest standards, targeting the needs of customers and their growing demands for product offer – adds the vice-president of LPP Logistics.

The choice of Romania as the location of the new warehouse facility is not only a response to the Polish clothing company’s plans to tap into the potential of developing its sales network in the region.

– On the occasion of the construction of the Group’s first foreign distribution centre, we also decided to make a significant change as regards the route of delivery of goods from factories. Until now, we had been relying mainly on sea transport and the potential of Polish ports. All goods were directed to Poland, where our two distribution centers operate. From there, the assortment went to the stores around the world and our Fulfillment Centre warehouses. Situating the facility in southern Europe gives us the opportunity to take advantage of the infrastructure of Romania’s largest port, Konstanca, and thus significantly reduce costs and delivery times in the Southern European region by minimizing the so-called last mile separating the stores from the distribution centre. It is therefore also a change with a significant effect in terms of the scale of the environmental impact of our entire distribution network – explains Sebastian Sołtys.

As anticipated by the investor, the center will begin operations at the end of 2023. The facility will allow for the storage of about 35m garments and accessories on about 45,000 pallet spaces and the shipment of 3.7m pieces per week. Thanks to the use of optimum process and technological solutions, the facility will also serve as a cross dock hub for some of the deliveries from Poland.

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LPP Logistics is a logistics operator managing LPP Group’s procurement and distribution network comprising distribution centres and Fulfillment Centres with a total area of nearly 460,000 square metres. It operates on three continents providing a full range of logistics services – from sea, rail and road freight, through the operation of its own customs agency, to advanced warehouse logistics using modern systems such as WMS, warehouse automation and Warehouse Intelligence solutions based on artificial intelligence algorithms.

LPP is a Polish family business and one of the fastest growing clothing companies in the region of Central and Eastern Europe. For 30 years, it has been successfully operating in Poland and abroad, offering its collections in such prestigious capitals as London, Helsinki or Tel Aviv. LPP manages five fashion brands: Reserved, Cropp, House, Mohito, and Sinsay, whose offer is available today in stationary and online stores in nearly 40 markets worldwide. The company has a chain of over 1800 stores with the total area of 1.5 million m2 and distributes clothing and accessories to 3 continents every year. LPP also plays an important role as it employs over 24 thousand people in its offices and sales structures in Poland, Europe, Asia, and Africa. The company is listed on the Warsaw Stock Exchange in the WIG20 index and belongs to the prestigious MSCI Poland index.

LPP Logistics’ Fulfillment Center in the Podkarpacie region has begun operations

LPP Logistics has officially launched its new Fulfillment Center in Jasionka near Rzeszów. The new investment, located in the municipality of Trzebownisko, will boost the company’s logistics efficiency, supporting the distribution of e-commerce shipments both domestically and in foreign markets. The warehouse, with a total area of 69,000 square metres and the capacity to store up to 7m items, has been equipped with automation systems, ensuring the handling of up to 100,000 orders per day. The new facility meets the requirements of BREEAM certification at the Excellent level, thereby guaranteeing user comfort and efficiency, while taking into account solutions in line with environmental protection principles.

The new warehouse in Podkarpacie with an area of 69 thousand square metres is a new addition to the distribution network managed by LPP Logistics, which, together with the facility in Jasionka, already comprises eight locations with a total area of over 450 thousand square metres. These include: distribution centres in Pruszcz Gdański, Brześć Kujawski and Gdańsk, as well as five warehouses for online sales in Poland and abroad. For the Gdańsk-based apparel company serviced by LPP Logistics, the new facility constitutes an important step toward streamlining the distribution of e-commerce orders both domestically and for customers from the Czech Republic, Slovakia, Slovenia, Hungary, Ukraine, and the Baltic States.

– From the perspective of the new logistics company, the launch of the Fulfillment Center in Jasionka near Rzeszów is an important moment in the development and expansion of our operational capacity. We are pleased that, despite the difficult geopolitical situation, the facility was commissioned on schedule and is fully adapted to our needs. Thanks to the commitment of our partners and our team, after many months of hard work, consultations and the creation of optimum solutions, we can say that we have achieved success – stresses Kamil Kawałek, logistics network development manager, LPP Logistics.

The innovative solution that LPP Logistics focused on at FC Podkarpacie is advanced technology to support parcel shipping operations to the customer. The applied technology of as many as seven integrated, automatic conveyor lines of packing stations with a shipping sorter not only has an impact on the efficient processing of orders, but also on the convenience of their handling. It was decided that the new warehouse will benefit from a sorting solution that can be found in large courier sorting plants. A cross-belt shipping sorter will allow transporting and sorting parcels to individual regions, countries or courier companies at a speed of over 5,000 parcels per hour. High-quality vision systems, in turn, allow for very high accuracy in sorting operations of parcels moving on the line at speeds as high as 1.6 m/s.

– The new investment will render it possible for us to handle online orders even more efficiently. Located in southern Poland, FC is the perfect so-called “gravity centre” for us to handle the growing volumes of online orders both in Poland and in neighbouring countries. The facility in Podkarpacie is the largest Fulfillment Center warehouse in our network to date, which, providing simultaneous storage of up to seven million items, will allow us to present our customers with a very wide assortment of products in online stores. We have implemented new automation solutions in the facility, guaranteeing the speed of the shipping process and smooth handling of e-commerce orders. This, in turn, will streamline warehouse operations and shorten lead times, as well as increase the efficiency of our daily cooperation with couriers. Ultimately, this translates into convenient shopping and customer satisfaction, as we are able to provide them with efficient service even during peak periods such as Black Friday or seasonal and holiday sales – assures Sebastian Sołtys, vice-president of LPP Logistics.

The FC Podkarpacie building meets the requirements for BREEAM certification at the Excellent level. The investment, with a total area of 69,000 square metres, has been surrounded by flower meadows and plantings of trees and shrubs, and the warehouse spaces have access to natural light in 30%. The building also benefits from specialized systems to reduce the facility’s water consumption by a min. 65%.The choice of location and the solutions used allow not only to reduce the impact of the facility on the environment, including an additional reduction in CO2 emissions. Already at the design stage, the impact on the well-being and health of its users was taken into account. Lighting, heating, air conditioning and ventilation installations have been optimized to ensure the comfort of employees. Also with this in mind, a number of amenities have been introduced at the site, including two bus lines connected directly to the warehouse.

Since the beginning of the year, as in the case of its other warehouse facility locations, LPP Group has implemented a local social support programme in cooperation with the Trzebownisko Municipality, which consists in organization of joint initiatives for the benefit of the municipality’s youngest residents. Together with the local authorities, the Group supports education by funding school starter kits for first graders, scholarships for the most talented students and organizing extra-curricular English classes.

LPP Logistics also plans to conduct research and development activities as part of the new investment. The concept is about logistics and IT specialists creating volume predictions, conducting research, developing and managing advanced robotics-supported systems to help face the challenges posed by an omnichannel sales strategy.

The investment was developed by Panattoni – the leader in the industrial real estate market in Europe. The developer has already delivered facilities totalling 170,000 square metres for LPP in Poland. – Two fulfillment centres opened within four months is a considerable support for our business partner – LPP Group. It’s an amazing feeling to be able to see such a clear contribution to the growth of a Polish brand. Once again, in challenging times, we have proven to be a guarantor of stability, providing a strategic, technologically advanced facility with a very large area, perfectly tailored to the customer’s expectations – says Marek Dobrzycki, Managing Director at Panattoni, and adds – The  opening of the fulfillment centre is also great news for Rzeszów and the entire Podkarpacie region. The international scope of the investment confirms the huge potential of this location, which will attract more operators in the future.

The video presenting LPP Logistics’ new warehouse facility in Podkarpacie:

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LPP Logistics is a logistics operator managing LPP Group’s procurement and distribution network comprising distribution centres and Fulfillment Centres with a total area of nearly 450,000 square metres. It operates on three continents providing a full range of logistics services – from sea, rail and road freight, through the operation of its own customs agency, to advanced warehouse logistics using modern systems such as WMS, warehouse automation and Warehouse Intelligence solutions based on artificial intelligence algorithms.

LPP is a Polish family business and one of the fastest growing clothing companies in the region of Central and Eastern Europe. For 30 years, it has been successfully operating in Poland and abroad, offering its collections in such prestigious capitals as London, Helsinki or Tel Aviv. LPP SA manages five fashion brands: Reserved, Cropp, House, Mohito, and Sinsay, whose offer is available today in stationary and online stores in nearly 40 markets worldwide. The company has a chain of over 1800 stores with the total area of 1.5 million m2 and distributes clothing and accessories to 3 continents every year. LPP also plays an important role as it employs over 24 thousand people in its offices and sales structures in Poland, Europe, Asia, and Africa. The company is listed on the Warsaw Stock Exchange in the WIG20 index and belongs to the prestigious MSCI Poland index.

LPP summarises third quarter results and prepares for a slowdown in demand

  • In the third quarter of the present financial year, the revenues of the Polish clothing manufacturer exceeded PLN 4.3bn, which is a YoY increase of almost 40%. (data excluding the Russian market in both comparable quarters).
  • More than 23% YoY growth in e-commerce sales brought the company more than PLN 1bn in revenues in the past quarter, which accounted for 23.6% of the Group’s revenues.
  • In omnichannel terms, the highest growth rate of 70% YoY was recorded by the Sinsay brand, which achieved revenues exceeding PLN 1.7bn in the third quarter.
  • The implementation of the adopted strategy to strengthen the presence of LPP brands in European markets brought the company another quarter of higher revenues from abroad, which in the period from August to October accounted for nearly 60% of the Group’s revenues.
  • Double-digit revenue growth remains a priority in the company’s plans for the next financial year, mainly due to investments in the development of the Sinsay and Reserved brands in new markets in the offline and online channels.

The development strategy adopted by LPP with the western and southern parts of Europe as its focus brought the expected results and revenues of just over PLN 4.3bn at the end of the third quarter of this financial year. Given that the Russian market is excluded in both comparable periods, this means sales dynamics of almost 40% YoY. The gross margin in the period under review fell to 51% due to unfavourable exchange rates, the increase in the share of the Sinsay brand in total revenues, and the need to sell off products destined for eastern markets. Despite this fact, the company generated a net profit of PLN 395m between August and October. The omnichannel sales results are mainly the outcome of the implementation of the plan to open new stores and e-commerce debuts in new markets. As a result, at the end of October this year, LPP offer was available in 1,837 stores located in 25 countries and in 32 online markets.

– Despite another quarter affected by the situation across our eastern border, we decided to focus on implementing our business plans and strengthening the presence of our brands in markets that guarantee us a stable situation for the company. As the financial results generated in the period from August to October show, this was the right decision. Comparing the third quarter of this year with the same period of the previous year, excluding operations in Russia, we can speak of a nearly 40% YoY increase in revenues. This is primarily the result of the successful casual Mohito collections for the autumn-winter season and the good reception of Sinsay’s offer in new markets, both in traditional stores and online. This is a good sign for us for the coming year as well. Given the continuing inflationary pressure and the expected increasing tendency to reduce consumer spending, investments in the development of value-for-money brands are, in our opinion, a good direction – comments Przemysław Lutkiewicz, Vice-President of the Management Board of LPP.

Thanks to investments in the development of online stores in new markets and increased marketing expenditure, the past quarter was marked by double-digit growth in e-commerce for LPP. Sales in this channel accounted for 23.6% of the Group’s sales and brought the company over PLN 1bn in revenue. At the same time, 71% of purchases were made via mobile devices. The growing interest in this form of contact among customers is also confirmed by the popularity of the Sinsay brand app, which in less than six months from its launch secured a place among the most popular mobile applications in Poland, already generating 40% of the brand’s domestic sales. For Reserved, on the other hand, it was as much as 45% The clear trend of seeking quick and easy access to the offer of clothing brands has prompted LPP to make further investments in this area. The company made a decision on the roll-out of Reserved and Sinsay mobile apps in further European markets with the highest e-commerce growth rate in the third quarter.

The share of revenues generated abroad at the end of the third quarter accounted for nearly 60% of the Group’s revenue, with an increase in retail floorspace of almost 24% YoY. The top countries with the highest nominal sales again included Romania, as well as the Czech Republic and Ukraine, where 122 stores were operational at the end of October. The growth potential abroad, forecast on the basis of interest in LPP’s brands offer, prompted the company to accelerate the launch of stationary sales of the Sinsay brand in further markets and to maintain its plans to expand Reserved retail floorspace.

– The observed sales dynamics in European markets confirm our conviction that the decision taken after our exit from Russia to strengthen our presence in this region was the right one, and we are maintaining our goals despite the numerous challenges that still arise. We are continuing to prepare for next year’s debut of Reserved in two locations in Milan, as well as to expand in the important markets where we are already present, adding, among others, three new stores in London and a new location in the German market to the flagship brand’s shop portfolio. In turn, we view the positive reception of Sinsay’s offer in the new online markets as a good forecast for the planned acceleration of the debut of the brand’s stores in Italy and Greece later this financial year. We are convinced that the decision to open a design centre for our youngest brand in Barcelona, which was also completed this year, will allow us to better anticipate expectations and align our collections with the tastes of consumers in the markets where we see the greatest potential for development – adds Przemysław Lutkiewicz.

The fulfilment of LPP’s business plans in the third quarter was accompanied at the same time by a significant increase in costs in all categories. The increase in operating costs by almost 50% YoY is mainly inflation-based, related to higher costs of traditional stores – energy charges, higher wages and growing costs of materials and logistics, as well as higher spending on e-commerce – mainly in terms of online marketing.

The LPP Group’s stock levels in the period under review were also strongly influenced by the market situation and the need to change business plans. Despite a decrease of nearly PLN 1bn compared to the previous accounting period, their level in nominal terms was 17.5% higher YoY and slightly more than 32% higher YoY per m2 of retail space. This is, on the one hand, a result of the withdrawal from Russia along with the goods destined for this market, as well as orders for the autumn/winter season which were realised more in advance and accounted for around 90% of the stock at the end of October.

– We are keeping a close eye on the market situation and customer reactions to the changes that are taking place. And although we have not yet seen the effect of reduced demand for clothing in the third quarter of this year, we expect that the first months of the coming financial year may bring us a significant slowdown, which we are already preparing for. A rational cost policy and the adaptation of our merchandising and inventory management strategies to the expected levels of demand are key factors at present to respond to the unfavourable macroeconomic situation. And while we are not abandoning our plans, bearing in mind the future and the stability of the company, today we are looking at profitability of investment with much greater care. We are convinced that even in the face of the expected crisis, it is the strengthening of our presence in regions that guarantee the safety of our investments that will allow us to survive this difficult period for the industry and build the foundation for further development of the company in the long term – comments Przemysław Lutkiewicz.

The investments carried out by LPP this year, for which the company plans to spend a total of PLN 1.1bn, concern not only the development of the retail chain. The Gdańsk-based company has also decided to expand the Reserved brand’s offer with an assortment from the ‘home’ segment. The new product line will be available online already in the spring-summer 2023 season.

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LPP is a Polish family business and one of the fastest growing clothing companies in the region of Central and Eastern Europe. For 30 years, it has been successfully operating in Poland and abroad, offering its collections in such prestigious capitals as London, Helsinki or Tel Aviv. LPP SA manages five fashion brands: Reserved, Cropp, House, Mohito, and Sinsay, whose offer is available today in stationary and online stores in nearly 40 markets worldwide. The company has a chain of over 1800 stores with the total area of 1.5 million m2 and distributes clothing and accessories to 3 continents every year. LPP also plays an important role as it employs over 24 thousand people in its offices and sales structures in Poland, Europe, Asia, and Africa. The company is listed on the Warsaw Stock Exchange in the WIG20 index and belongs to the prestigious MSCI Poland index.

SAVE THE DATE: LPP’s 3Q22/23 videoconference, 15th December, 12.00 am CET

Dear Sir or Madame,

LPP, the leading CEE fashion company, has the pleasure to invite you to participate in its videoconference, on Thursday, 15th December, 12.00 pm CET.

The CFO, Mr Przemysław Lutkiewicz and IR Manager, Magdalena Kopaczewska will comment on the company’s 3Q22/23 numbers and developments.

Videoconference in English will be available under the following link:

https://livingmedia.com.pl/live/lpp/market3Q2022

During the online broadcast participants will have the possibility to ask questions using chat.

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LPP is a Polish family business and one of the fastest growing clothing companies in the region of Central and Eastern Europe. For 30 years, it has been successfully operating in Poland and abroad, offering its collections in such prestigious capitals as London, Helsinki or Tel Aviv. LPP SA manages five fashion brands: Reserved, Cropp, House, Mohito, and Sinsay, whose offer is available today in stationary and online stores in nearly 40 markets worldwide. The company has a chain of over 1700 stores with the total area of 1.4 million m2 and distributes clothing and accessories to 3 continents every year. LPP also plays an important role as it employs over 24 thousand people in its offices and sales structures in Poland, Europe, Asia, and Africa. The company is listed on the Warsaw Stock Exchange in the WIG20 index and belongs to the prestigious MSCI Poland index.

Reserved hailed the most important clothing brand in Poland

For the second time now, the Editorial Board of “Forbes” published a ranking of the Top 200 most valuable Polish brands. The top 20 included Reserved, which, together with House and Sinsay, landed a place on the podium in the list of clothing brands. The three brands of the Gdańsk-based company recorded spectacular increases in valuation in Poland.

The “Forbes” ranking was created by the Editors of the monthly together with Minds & Roses – a research company. The ranking was based on a consumer survey of 300 Polish brands and the most significant foreign competitors. Their value was calculated based on their position and sales achieved in the Polish market.

Reserved ranked 19th in the nationwide ranking, moving up as many as 14 positions year-on-year. The biggest jump up in the ranking, by 45 places, was recorded by House, which was ranked 39th, and Sinsay – the youngest brand in the company’s portfolio – was ranked 41st. Therefore, three LPP brands found themselves on the podium in the “clothing” category.

The total value of this year’s winners amounts to nearly PLN 57.6bn. The largest growth was recorded by clothing industry, up almost 56% year-on-year, gaining a total of PLN 2.0bn, of which over a half – PLN 1.3bn – was the value of three LPP brands: Reserved, House, and Sinsay. The House brand’s valuation of more than PLN 320m constitutes a rise by nearly 200%, a record result among the competing brands.

The record valuation of House and the very high position of our flagship brands Reserved and Sinsay are the result of a long-term development strategy and the brands’ excellent adaptability in the face of new market conditions. Focusing our attention on the changing habits and expectations of our customers, dynamic development of the e-commerce area and creating collections in line with the latest fashion trends is reflected in the perception of our brands by consumers and the correspondingly high market valuation of LPP – emphasizes Przemysław Lutkiewicz, vice-president of the management board, LPP.

The recognition of the brands belonging to the Gdańsk company is the success of the design teams and marketing activity of each brand. The flagship Reserved department operates in Gdańsk, with the assistance of the Warsaw design office, and the teams create collections of women’s, men’s and children’s lines, including premium quality line, as well as Eco Aware collections now accounting for almost 40% of the brand’s offer.

Marketing activities have surely contributed to the perception of the brand. In recent months, cooperation with Monika Brodka brought Gold in the Advertising Creators Club Competition in the BEST OF META category (ads made via social media) and a Silver Sword in the CRAFT category, for a photo shoot by Bartek Wieczorek. Currently, a collection with vintage aesthetics references is being launched, realized in collaboration with Blanca Miro, a Spanish fashion curator.

The other LPP brands are developing just as rapidly. The House and Mohito teams are working in Cracow, while Cropp and Sinsay, the youngest and fastest growing brand in the company’s portfolio, are operating in Gdańsk. The diversity of the latter brand’s collections, aimed at families, women and men, complemented by the Home décor and Beauty lines introduced over a year ago, provides a wide range of products to customers, while guaranteeing easy and accessible shopping experience. Modern and rapidly developing e-commerce channels, including the Sinsay mobile app launched six months ago and already downloaded more than 2.5m times, account for over 30% of online orders.

LPP has been shaping the Polish fashion market since the company’s inception. Both in the headquarters, in Gdańsk, and in the Cracow and Warsaw offices, there are teams of talented and creative specialists who design, order and provide marketing support for collections appreciated by customers. Product or visual communications departments of individual brands are practically the heart of LPP. They consist of people who have an impact on co-creating a friendly work environment. When it comes to the company’s standing, another significant aspect is the culture of our organization strengthened by employer branding activities. This is what influences the perception of the company as a place open to talented, diverse and passionate employees from design specialists, graphic designers, technologists to promotion, merchandising and marketing professionals – points out Sławomir Ronkowski, director of internal communications and CSR at LPP.

Today, LPP operates in nearly 40 countries and has a network of over 1,700 stores. In the second quarter of 2022/23, the company’s revenues increased by over 45% year-on-year, exceeding PLN 4.3bn. The past quarter brought the Gdańsk-based company more than PLN 1.2bn in e-commerce revenue and a high online sales growth rate of 54% year-on-year. Worldwide, LPP employs over 24,000 people, including more than 15,000 in Poland. A total of over 1,100 people oversee the process of creating fashion collections for the five brands in the company’s portfolio. The company’s growth, including expansion into further foreign markets, has been a driver to plan further expansion of its departments and search for employees with various competencies, including in areas not directly related to fashion.

Zdjęcie logo marki Reserved przy wejściu do salonu

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LPP is a Polish family business and one of the fastest growing clothing companies in the region of Central and Eastern Europe. For 30 years, it has been successfully operating in Poland and abroad, offering its collections in such prestigious capitals as London, Helsinki or Tel Aviv. LPP SA manages five fashion brands: Reserved, Cropp, House, Mohito, and Sinsay, whose offer is available today in stationary and online stores in nearly 40 markets worldwide. The company has a chain of over 1700 stores with the total area of 1.4 million m2 and distributes clothing and accessories to 3 continents every year. LPP also plays an important role as it employs over 24 thousand people in its offices and sales structures in Poland, Europe, Asia, and Africa. The company is listed on the Warsaw Stock Exchange in the WIG20 index and belongs to the prestigious MSCI Poland index.

LPP as best exporter and employer according to the TOP ,,100 Pomerania” ranking

The editorial board of Dziennik Bałtycki has announced the winners of the 26th edition of the ,,TOP 100 Pomerania” been identified. Among these, LPP – a clothing company – was awarded in as many as two categories: Best Exporter and Best Employer. In addition, the Gdańsk-based company was included in the list of 12 distinguished institutions that have shown the greatest commitment to helping Ukraine.

,,TOP 100 Pomerania” is the only breakdown of the largest companies in the region, which has been published by Dziennik Bałtycki every year for 25 years now. Yet again, LPP found itself among the distinguished Polish companies with the greatest significance for the Pomeranian economy. In this year’s edition of the competition, the Polish clothing manufacturer took first place in as many as two categories.

LPP was awarded a statuette in the category of Best Exporter 2021, an award to honour a company with the greatest revenue increase abroad in 2021 as compared to 2020. Despite the difficulties arising from the pandemic, the situation in Ukraine and the uneasy socio-economic situation, the company maintained profitability at a high level, and thanks to well-thought-out decisions managed to come away unscathed from the crisis situation.

At LPP, change is our middle name. Consistent growth, both in terms of sales volume and geographic reach, requires us to be flexible in adapting to uncertain and changing market conditions. Regardless, our ambition remains to stay in the game even in such difficult times and to offer our customers the highest level of services and products – comments Sławomir Ronkowski, director of internal communications and CSR, LPP.

The Gdańsk-based company also received the highest distinction in the category of Best Employer 2021. When selecting the winner in this case, the jury took into account the increase in employment figures compared to 2020. LPP was also included in the list of 12 institutions that showed the greatest commitment to helping Ukraine in Pomerania.

The year 2021 was a time of intensive growth for LPP Group by the end of the year we had increased employment to almost 32,000 people. As we expand our team, we always keep in mind our Pomeranian roots and the values that have guided us since the very start. We offer good opportunities for professional development, which, combined with the competence and commitment of our employees, allows us to develop and promote Polish creativity through our brands, which today are already recognized in nearly 40 markets – emphasizes Sławomir Ronkowski.

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LPP is a Polish family business and one of the fastest growing clothing companies in the region of Central and Eastern Europe. For 30 years, it has been successfully operating in Poland and abroad, offering its collections in such prestigious capitals as London, Helsinki or Tel Aviv. LPP SA manages five fashion brands: Reserved, Cropp, House, Mohito, and Sinsay, whose offer is available today in stationary and online stores in nearly 40 markets worldwide. The company has a chain of over 1700 stores with the total area of 1.4 million m2 and distributes clothing and accessories to 3 continents every year. LPP also plays an important role as it employs over 24 thousand people in its offices and sales structures in Poland, Europe, Asia, and Africa. The company is listed on the Warsaw Stock Exchange in the WIG20 index and belongs to the prestigious MSCI Poland index.

LPP’S STANCE ON SETTLEMENTS WITH SEWING FACTORIES IN BANGLADESH

As regards the false reports appearing in the public space about the alleged payment arrears of LPP to the sewing factories located in Bangladesh, we would like to inform that all financial obligations to Bangladeshi suppliers are fulfilled by the company on an ongoing basis.

At the same time, we would like to confirm that recently, due to the outbreak of war in Ukraine and the termination of operations in Russia, the company has experienced temporary disruptions in the schedule of receiving orders from factories.

Furthermore, we would like to emphasise that:

  • The temporary suspension of some deliveries is a direct consequence of the outbreak of war in Ukraine and the discontinuance of LPP’s operations in Russia. LPP was faced with this situation at a time of dynamic growth for the Russian company, which accounted for over 20% of LPP Group revenues. As a result of the sale of the entity in May this year, the need arose to manage the merchandise ordered (including for several hundred planned stores, which did not ultimately materialise) for this market, with limited storage capacity in our warehouses. This has translated into a temporary extension of the timelines for receiving orders from suppliers in Bangladesh.
  • At the same time, the rescheduling of order receipt allowed for preventing cancellation of orders at the Bangladeshi sewing factories and effective storage of the goods in LPP’s warehouse spaces.
  • As a company that is responsible and aware of its obligations towards its suppliers, we are in constant contact with all companies affected by this situation. We hold individual discussions and make arrangements with them regarding the timelines for receiving orders.
  • We are also in constant contact with the local trade organisation, Bangladesh Garment Manufacturers and Exporters Association (BGMEA), to be able to ensure the right systemic solutions for our partners.
  • At the same time, we ensure that all goods received will be used by LPP. These products will be rescheduled for subsequent seasons and/or offered for sale in Poland or in other markets where we are present.

We would like to reiterate with utmost firmness that the company does not have any outstanding payments towards the sewing factory in Bangladesh.

lppsa raport roczny miejsce pracy 900x600px

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LPP is a Polish family business and one of the fastest growing clothing companies in the region of Central and Eastern Europe. For 30 years, it has been successfully operating in Poland and abroad, offering its collections in such prestigious capitals as London, Helsinki or Tel Aviv. LPP SA manages five fashion brands: Reserved, Cropp, House, Mohito, and Sinsay, whose offer is available today in stationary and online stores in nearly 40 markets worldwide. The company has a chain of over 1700 stores with the total area of 1.4 million m2 and distributes clothing and accessories to 3 continents every year. LPP also plays an important role as it employs over 24 thousand people in its offices and sales structures in Poland, Europe, Asia, and Africa. The company is listed on the Warsaw Stock Exchange in the WIG20 index and belongs to the prestigious MSCI Poland index.

Sinsay app among the most popular mobile apps in Poland

In less than six months since its launch, the Sinsay mobile app, prepared by Silky Coders and Future Mind, has recorded 2.5m downloads, while taking the lead in the “shopping” and “free apps” categories in the AppStore and Google Play stores. Thanks to the app, customers today make already 30 percent of the brand’s e-commerce orders.

 

The trend of growing interest in online shopping, which has been observed for a long time now among apparel customers, is not slowing down. Sustained high sales dynamics in the e-commerce channel of all LPP brands, including the growing popularity of shopping via mobile devices, confirm that customers increasingly value easy access to the offer and the ability to make quick purchases. To meet their expectations, back in 2021, the Polish clothing company decided to start work on a mobile app for its youngest brand.

The mobile app for the Sinsay brand appeared on the market in April this year. In the first weeks, it was tested on a selected group of customers, and already in May it went into general distribution. In June it surpassed one million downloads, and this was an organic growth, without the support of promotional activities. Today it already hit 2.5m downloads.

Now, over 30% of Sinsay’s e-commerce orders are processed through the app. This share is increasing month by month.

Such great interest in the app has exceeded our expectations. In the coming months, we will significantly expand its functionalities, which will certainly translate into an even higher share of sales. According to my estimates, it will soon generate half of the revenue at Sinsay and the vast majority of traffic on the brand’s website. Customers who use the app are more likely to return to us and are satisfied with their shopping experience. It is the main pillar of our future development and for this reason it’s already the most important sales platform for us – emphasizes Michał Laskowski, e-commerce director, Sinsay.

The app is highly rated by users – it received 4.7 points out of a possible 5 in the AppStore, and as many as 4.9 in the Google Play store. It ranks high in the “shopping” and “free apps” categories.

Responding to the needs of LPP and its fastest-growing brand, we had to create an innovative app that meets the needs of a diverse customer segment, goes far beyond basic functionality, and on top of that, sets new standards in fashion m-commerce. That was the base for our efforts to design the app’s user experience and interface from scratch, placing great emphasis on intuitiveness and ease of use – says Tomasz Woźniak, CEO of Future Mind.

The app’s key features include Sinsay ID which users can add as a widget on their phone. This solution enables a quick return of goods without a receipt, if the purchase was previously registered in the app, as well as easier pickup of the order in a stationary store. After scanning the ID, the store assistant sees the merchandise ready for pickup, and during the return, the system links the products to the customer’s individual code.

In the latest version of the app, users have several payment systems at their disposal, including PayPo and Blik One Click, which were introduced in recent weeks, an appraisal form, color variants on product lists, and a novelty tab with pieces that have just gone or will go on sale. This makes it easier to plan your shopping and allows to create a list of favourite products.

– The strengths of the Sinsay app lie in its visual layer and information architecture, which have been optimized for friendly, personal communication. The whole thing engages users and corresponds perfectly with the brand image – emphasizes Przemysław Wiśniewski, Senior Product Owner at Silky Coders.

In addition to the latest functionalities, the app users will find the location of stores in their area, a function for scanning products and information about their availability online or in another store. Upon downloading the app and logging in for the first time, customers receive a welcome voucher for a 15% shopping discount.

All of the Polish clothing manufacturer’s efforts to make it easier for customers to access Sinsay’s offer and shop in the omnichannel model confirm the importance of the youngest brand in the company’s revenue structure. Investments in the latest UX solutions are also a response to the brand’s customer preferences, with 40% of revenue in the second quarter of this year already coming from e-commerce sales.

W męskiej dłonie telefon marki iPhone z otwartą aplikacją Sinsay

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LPP is a Polish family business and one of the fastest growing clothing companies in the region of Central and Eastern Europe. For 30 years, it has been successfully operating in Poland and abroad, offering its collections in such prestigious capitals as London, Helsinki or Tel Aviv. LPP SA manages five fashion brands: Reserved, Cropp, House, Mohito, and Sinsay, whose offer is available today in stationary and online stores in nearly 40 markets worldwide. The company has a chain of over 1700 stores with the total area of 1.4 million m2 and distributes clothing and accessories to 3 continents every year. LPP also plays an important role as it employs over 24 thousand people in its offices and sales structures in Poland, Europe, Asia, and Africa. The company is listed on the Warsaw Stock Exchange in the WIG20 index and belongs to the prestigious MSCI Poland index.

Zdjęcie budynku centrum dystrybucyjnego od strony wejścia, z logo LPP na ścianie po prawej, ujęcie ukośne, miniaturka

LPP Distribution Centre in Brześć Kujawski hailed as the Best New Warehouse of the Year in Central and Eastern Europe

The distribution centre in Brześć Kujawski has been recognised as the Best New Warehouse of the Year in Central and Eastern Europe. The 12th edition of the CEE Region Eurobuild Awards is behind us.

The 12th CEE Region Eurobuild Awards gala was held in Warsaw, honouring the best projects and the most outstanding people and teams that have stood out among the construction industry players in Central and Eastern Europe over the past 20 months.

The winners in 35 categories were selected by more than 400 tenants and a jury of 200 experts. The LPP Distribution Centre in Brześć Kujawski was recognised as the Best New Warehouse of the Year in Central and Eastern Europe. As many as 10 facilities were nominated in this category.

The award committee appreciated the investment for its aesthetics, functionality and implementation of sustainable development principles. The Distribution Centre, designed by the architectural office Tacakiewicz Ferma Kresek, stands out in the market of industrial and warehouse facilities due to its many elements, such as a unique entrance portal, circulation routes and surrounding greenery, a façade reminiscent of a fabric structure, spacious interiors, large glazed areas providing daylight, bus platforms and bicycle infrastructure in front of the building, as well as ecological solutions such as photovoltaic panels, heat recuperators, water recovery installations and motion sensors controlling electrical installations. The ambitious vision of LPP Logisitics, in cooperation with the designers and contractor, made it possible to create a trend-setting facility for this type of investment.

The 75,000 m2 state-of-the-art centre opened in February 2022 and provides for the distribution of up to 8m items of clothing and accessories per week. Its storage capacity is 40m items, which is equivalent to 67,000 pallets of goods. The automation solutions used, including two sorters with a unique drop design, enable up to 1,000 stores to be served simultaneously. The facility, powered by renewable energy, was designed with sustainable building standards in mind and has been BREEAM certified.

The awards are organised by Eurocee, publisher of the English-Polish monthly – Eurobuild CEE. The Eurobuild Awards aim to recognise the most outstanding representatives of the construction industry and projects, with the long-term goal of helping to create a group of professionals who will have a real influence on the shape of the investment market in the CEE region, as well as supporting the process of establishing the principles and directions that this market will follow in the future.

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LPP is a Polish family business and one of the fastest growing clothing companies in the region of Central and Eastern Europe. For 30 years, it has been successfully operating in Poland and abroad, offering its collections in such prestigious capitals as London, Helsinki or Tel Aviv. LPP SA manages five fashion brands: Reserved, Cropp, House, Mohito, and Sinsay, whose offer is available today in stationary and online stores in nearly 40 markets worldwide. The company has a chain of over 1700 stores with the total area of 1.4 million m2 and distributes clothing and accessories to 3 continents every year. LPP also plays an important role as it employs over 24 thousand people in its offices and sales structures in Poland, Europe, Asia, and Africa. The company is listed on the Warsaw Stock Exchange in the WIG20 index and belongs to the prestigious MSCI Poland index.

The second quarter of this year meant intense development of LPP in European markets

• In the second quarter of the 2022/23 financial year the revenues of the Polish clothing manufacturer increased by over 45% YoY[1], exceeding 4.3 PLNbn.

• The past quarter brought the Gdańsk-based company more than PLN 1.2bn in e-commerce revenues and a high online sales growth rate of 54% YoY.

• Dynamic expansion of the Sinsay brand – sales growth of 63% YoY, further development of retail space and excellent results on new e-commerce markets: in Greece, Spain, and Italy.

• Consistent growth in European markets brought LPP another quarter in a row of higher revenues from abroad, which accounted for 57% of Group revenues in Q2 2022/23.

• Western Europe a source of future growth for LPP: plans for 2023 include the debut of Reserved in the fashion capital – Milan – and expansion of the brand in London – opening stores in three shopping malls.

In the second quarter of this financial year, LPP performed well financially despite the changes related to the war going on across the eastern border. Even after the company’s withdrawal from the Russian market and in view of the security-restricted operation of the business in Ukraine, where 96 of LPP’s 159 brand stores are currently operational, sales revenue in the period from May to July exceeded PLN 4.3bn.

Despite the lower gross margin, which reached 52% in the second quarter, the company generated a net profit of over PLN 514m for the first half of this year. The good results are the effect of consistent realisation of the goals that the Polish manufacturer had set out in its new strategy for development in foreign markets and at the same time confirm the rightness of the decisions taken in this area. The company maintains its growth targets of annual revenues of more than PLN 16bn in the 2022/2023 financial year and PLN 5bn in e-commerce.

As the financial figures for the past quarter show, compared to the period a year ago, when we were still operating in Russia, the Group’s total revenues increased by 19%t YoY. However, if we exclude the Russian market completely in both periods, we can speak of an increase of up to 45% In such difficult market conditions, this is a very good result and confirms the positive reception of our collections in the other countries. In all markets, customers were keen to shop both in-store and online. Despite rising inflationary pressures, we are not seeing a slowdown in customer shopping trends at the moment. To a large extent, this is the result of interest in the autumn wardrobe change and the back-to-school offer – explains Przemysław Lutkiewicz, vice-president of the management board, LPP.

The hit collections also brought the company an increase in e-commerce turnover by as much as 54% and revenue from this channel of over PLN 1.2bn. The majority, 70%, of purchases were made via mobile devices. The company’s offer was available online in 32 countries. The highest growth in online sales, almost 90%, was recorded in the European market, and was driven by the dynamic development of Sinsay. The youngest brand in the LPP portfolio, thanks to intensive omnichannel development, performed very well in the second quarter and recorded growth of 63% YoY. As a result of online expansion abroad, in new e-commerce markets alone – in Greece, Spain and Italy – the brand achieved revenues of approximately PLN 23m, which is similar to the total performance of the Reserved pan-European e-store. Sinsay’s total revenues exceeded PLN 1.6bn, of which around 40% originated from the online channel. Expanding its network of traditional stores, the brand gained more than 50 new locations and increased its retail floorspace by more than 15% compared to the first quarter of this year.

We treat the growth of the Sinsay brand as a positive effect of the natural increase in the popularity of value-for-money offerings in the current economic climate. At the same time, although we are not yet experiencing a reduction in spending on clothing among customers in the sale of our brands, given the market conditions, we are reckoning that we will have to deal with the effects of inflation in the coming months. The weakening purchasing power of consumers, the rising dollar exchange rate, which means for us to purchase goods for future seasons at higher prices, and the inflationary increase in other costs, including transport, are already forcing us to raise prices. There are many indications that this trend will continue in the long term – comments Przemysław Lutkiewicz, vice-president of the management board, LPP.

The cost increase observed by the company is, on the one hand, a result of the development of the traditional network. On the other hand, however, it is also the result of intensifying inflationary pressure visible in every area of the company’s operations. Rising energy prices, which are an element of operating costs, are also not insignificant. In this context, the decision already taken last year to diversify the energy portfolio and use renewable energy to power the company’s facilities proved to be strategic. The ten-year contract with Figene Energia, signed in 2021, safeguards the company against the growing financial risks in the energy area. According to the contract, the supply of green energy from wind farms to the offices, the Distribution Centre in Pruszcz Gdański and selected LPP stores in Poland is expected to commence in January 2023.

Despite the difficult international situation and the market conditions in all countries affected, the second quarter of 2022/23 turned out to be another quarter for LPP in which revenues from abroad were higher than from Poland. In the period from May to July, they accounted for as much as 57% of total revenues. Consequently, the company had 1756 traditional stores in 25 markets, and the online offer was available in 38 countries. The best results were achieved in European markets, where, in addition to Poland, Romania (PLN 349m), the Czech Republic (PLN 284m) and Germany (PLN 200m) were the sales leaders. Europe also showed the highest turnover dynamics at 61% YoY.

– The high dynamics in the EU countries confirms that the change in strategy we made in the first quarter and our focus on developing the company in Southern and Western Europe was the right decision. The results achieved in the second quarter are a good forecast for the future and allow us to take an optimistic view of LPP’s presence in these regions. Preparations for the opening of Sinsay stores in new markets await us soon – in December 2022 in Italy and in the first quarter of the next financial year in Greece. Our plans for next year also include the debut of Reserved in the fashion capital, Milan, as well as the expansion of our flagship brand in London, where we want to open three new stores – concludes Przemysław Lutkiewicz.

With such ambitious development plans for the sales network, logistics support is crucial. Therefore, in the second quarter, the Group’s management board decided to start operations by an entity separated from the company’s structure – LPP Logistics. The new logistics operator is responsible for the management of all logistics facilities in the Group’s supply and distribution network, whose total area is currently close to 400,000 sq.m., and for further improvement of logistics operations in the supply chain. At the moment, the brands from the LPP Group are the key customers of LPP Logistics, but the company does not rule out using its logistics and warehousing potential for external entities in the future.

During the period under review, LPP also continued to implement further objectives of its sustainability strategy announced in 2019. The company has completed the work carried out in recent months to prepare a decarbonisation strategy, which will be submitted for review to SBT – a global organisation that supports private companies in the transition to a zero-carbon economy. At the same time, in line with the idea of development consistent with the principles of a circular economy, the company has begun a partnership with Use Waste. The contract with the Polish start-up will lead to the development of an innovative technology to produce yarn from textile waste, fulfilling the idea of circular fashion based on the textile-to-textile concept. To this end, LPP has decided to allocate the amount of PLN 1m by the end of next year.

[1]Percentage data obtained after excluding revenues from the Russian market in both comparable quarters.

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LPP is a Polish family business and one of the fastest growing clothing companies in the region of Central and Eastern Europe. For 30 years, it has been successfully operating in Poland and abroad, offering its collections in such prestigious capitals as London, Helsinki or Tel Aviv. LPP SA manages five fashion brands: Reserved, Cropp, House, Mohito, and Sinsay, whose offer is available today in stationary and online stores in nearly 40 markets worldwide. The company has a chain of over 1700 stores with the total area of 1.4 million m2 and distributes clothing and accessories to 3 continents every year. LPP also plays an important role as it employs over 24 thousand people in its offices and sales structures in Poland, Europe, Asia, and Africa. The company is listed on the Warsaw Stock Exchange in the WIG20 index and belongs to the prestigious MSCI Poland index.