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 region – emphasizes 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.
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.