LPP SA announces results for the fourth quarter and summarises the year 201519.02.2016
The owner of clothing brands – Reserved, Tallinder, Cropp, House, Mohito and Sinsay – has announced financial results for the fourth quarter of 2015. In the reporting period, LPP SA increased the total selling area by almost 17 percent and its distribution network covered 17 countries at the end of 2015. Last year’s revenues increased by 7.6 percent and exceeded PLN 5 billion. The company generated a net profit of PLN 352 million and implemented investments of PLN 489 million.
The revenues from sales in the fourth quarter of 2015 amounted to PLN 1.57 billion and increased by 12 percent year on year. In the analysed period, the company generated a net profit of PLN 173 million and opened new stores with a total area of nearly 45 thousand sq. m., thereby increasing its selling area to 843.5 thousand sq. m. The revenue from sales in the comparable stores increased in the fourth quarter by 3 percent compared to the same period of the previous year.
“The year 2015 was challenging for LPP because of the high exchange rate of the dollar, which negatively affected margins, and also due to increasing competition in the fast-fashion, especially in the area of online sales,” says Przemysław Lutkiewicz, LPP Vice President of the Management Board and Chief Financial Officer. In spite of this fact, the company generated sound financial results in 2015, which also resulted from the reduction of the cost per 1 sq. m. by as much as 14.5 percent. We focus on implementing our long-term strategy – expanding our sales network in the country and abroad, expanding the brand portfolio, expanding the number of our clients by those interested in the premium segment. At the same time, however, we need to adjust our plans to the current conditions. The priority for us is to find a balance between further effective development and minimising risks,” he adds.
Alongside the announcement of results for the fourth quarter of 2015, Przemysław Lutkiewicz informed about reviewing the plan of the sales network development in the Middle East where, due to the geopolitical situation, the opening of the new stores may be postponed to next year. LPP does not give up, however, the most ambitious projects – in recent weeks, the company presented a Tallindera collection and store – the first brand in the company’s portfolio in the premium segment. The Company also entered into a preliminary agreement for the lease of a building in London’s Oxford Street, where the flagship Reserved store is going to be created.
Due to the dynamic development of e-commerce in our region, last year the company decided to increase the range of online sales of its flagship brand – RESERVED – to other countries: the Czech Republic, Slovakia and Romania. Further investments in e-commerce are an opportunity to increase the competitiveness of the Group’s clothing brands in the segment. They include launching online stores of two other brands in the Czech Republic, Slovakia, Hungary and Romania this year.
The total value of all LPP’s investments in 2016 will amount to about PLN 370 million.
LPP SA, a company listed on the Warsaw Stock Exchange since 2001, is one of the fastest growing clothing companies in the region of Central and Eastern Europe. For more than 20 years, the company has been consistently operating in Poland and abroad, being successful on the demanding clothing market. LPP SA manages 5 popular fashion brands: Reserved, Cropp, House, Mohito and Sinsay, and early in 2016, it has unveiled its first premium brand – Tallinder. The company has a network of more than 1,600 stores and creates jobs for 20 thousand people at its offices and sales structures in Poland, Europe, Asia and Africa. LPP SA invests and wins new markets. In 2015, the company opened stores, among other things, in Egypt, Kuwait, Qatar and Saudi Arabia. In 2014, the company advanced to WIG20 stock exchange index, which generates a significant part of the turnover on the Warsaw Stock Exchange, and belongs to the prestigious MSCI Poland index.
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