LPP receives the Golden and Green CSR Leaf Award from Polityka weekly

Yet again, LPP has been recognised for its actions geared towards sustainable development and ESG in “Listki CSR” [“the CSR Leaves”] poll organized by “Polityka” weekly. This year, the Polish apparel company received two awards – the Golden Leaf for all its activities from an environmental, social and corporate governance perspective, and the Green Leaf, awarded for the first time to companies for which reducing their negative climate impact is a key element of their business operations.

For the eleventh time, “Polityka” weekly invited Polish companies to take part in the CSR Leaves competition, encouraging them to analyse their solutions supporting sustainable development and social involvement in the ESG model, i.e. those related to the management of the following areas: environment, society and corporate governance. In cooperation with the Deloitte consulting company and the Responsible Business Forum, the awards were granted to companies whose actions for sustainable development are implemented as part of their coherent strategy, based on international standards. In this year’s edition,  21 companies, including LPP, out of 126 entries were awarded the Golden Leaf by the jury.

– We are very pleased that the consistency with which we implement our sustainable development strategy has been appreciated by the jury of the competition yet again. We consider the Golden Leaf as a reflection of our long-term commitment to activities supporting the responsible approach to LPP development in the ESG model. We also see it as an appreciation of the quality and reliability of reporting projects that limit the environmental impact of the company’s operations – says Sławomir Ronkowski, Internal Communications and CSR Director, LPP.

To highlight the importance of climate transformation within business strategies of companies, a new category of the Green CSR Leaf was introduced for the first time this year. LPP was one of 14 organisations awarded with this distinction. The laureates were recognised for their commitment to solutions that exert a positive impact on the environment, such as calculating the carbon footprint and reporting the results, or creating strategies that include climate neutrality and education.

– It is now impossible to remain indifferent to climate change. Companies should feel accountable for the environmental impact of their operations. Here at LPP, we have been striving for years to achieve our reduction targets. We are proud that our pro-ecological activities have been recognised in Poland. The award obliges us and motivates to implement further long-term projects in this area – adds 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 nearly 1700 stores with the total area of over 1.4 million m2. Based on a global distribution network located in 3 countries, it 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.

Metalowa konstrukcja magazynu

Construction of the new LPP e-commerce warehouse in the Podkarpacie region is halfway finished

After nearly six months from the start of construction works, the topping out ceremony has been held in the main hall of the future LPP e-commerce warehouse located in Jasionka near  Rzeszów. The symbolic topping out of the construction works on the facility was an opportunity for the Gdańsk-based company to thank its partners and companies involved in the construction. During the ceremony, a letter of intent on partnership cooperation between LPP and Trzebownisko municipality was also signed.

The works on the construction of the Fulfillment Center, designed to handle online orders of the Polish clothing manufacturer – commenced in January this year – have reached their halfway point. During this period, all the ground work was completed and the foundations were poured, on which 400 concrete pillars were mounted, forming the basis for the steel structure of the facility’s roof, which has just been finished.

– The warehouse under construction in Jasionka is a key project for LPP from the perspective of streamlining our distribution process. That is why I am glad that after only a few months since the first dig of the shovel, together with our partners and in the presence of the regional authorities we can symbolically close the first stage of construction. The topping out ceremony serves to confirm that the project is proceeding according to schedule and in a few months, thanks to the determination of all the companies involved in the investment, the new facility will be integrated into LPP’s global logistics network – comments Jacek Kujawa, Vice-President of LPP.

Subsequent stages of the investment, including the  roofing and elevation works on the building scheduled for the end of June, will allow the developer, Panattoni, to start interior works soon. The assembly of the office part is also gaining momentum. The finishing works along with landscaping  around the warehouse are to be completed as early as in August. The hall building, scheduled to be made available by the developer at that time, will allow LPP to accept the first deliveries of technological facilities and start equipping the facility with warehouse systems, as well as prepare for the warehouse’s operational launch in the fourth quarter of this year.

The space under construction at Panattoni Park Rzeszów North is yet another e-commerce project for LPP – this year alone we will provide as much as 133,000 m2 to the company. The development of online sales favours the expansion of warehouse resources, and as our investments indicate – we are ready for it, offering our clients space tailored to selected processes in the best locations. We make sure that the facilities are close to sales markets and employees and have access to appropriate road infrastructure. All those criteria are met by our investment in the Podkarpacie region, where the works are progressing fast – said Martyna Sochaczewska, Leasing Director at Panattoni.

During the topping out ceremony at the construction site of the new warehouse, Lesław Kuźniar, head of Trzebownisko municipality, and Jacek Kujawa, Vice-President of LPP, also signed a letter of intent on cooperation in the execution of social projects in the municipality.

– Not only does the long-term perspective of LPP’s development in the region assume the implementation of our business plans, but it also entails involvement in the life of the local community and projects, responding to their real needs. That’s why I hope the action plan developed together with the municipality authorities will bring many real benefits to everyone – comments the Vice-President of LPP.

The first projects carried out by the company in cooperation with the municipality will be addressed to the youngest inhabitants. One such project will be to support a scholarship programme for primary school students. In response to the needs of local educational institutions, the company has also declared the implementation of the School Day-care Centre Support Programme, which envisages assistance in supplementing educational infrastructure and organising extra-curricular activities. A pilot project will include the Primary School in Jasionka. Over the coming years, the project will also include other schools in the municipality. Another important element of the activities undertaken by LPP will be a project called “Wyprawka dla pierwszaka” [“School starter kit”), i.e. gift packages prepared by the company for all pupils starting primary school in the new school year.

– I am glad that LPP has chosen our municipality to locate its new investment. I hope that the opening of the new warehouse will have a positive impact not only on the local labour market, but it will also become an impulse boosting further development of the whole region. What’s more, the letter of intent signed today is a clear sign that LPP wants to be an investor that will not only engage in the development of its business, but will also become an important participant in the social life of our municipality to the benefit of its residents – says Sławomir Porada, deputy head of Trzebownisko municipality.

Parallel to the construction works the company has started recruitment processes. In the first phase, it is planned to recruit workers for the positions of foremen, warehouse system operators and electro-mechanics, among others. LPP is also recruiting analysts and specialists roles for quality control, logistics, documentation and safety. All information about current recruitment for the open positions at FC Podkarpacie is available at www.lppsa.com/kariera/praca-w-logistyce/praca-na-podkarpaciu. The company expects to reach its target employment level of nearly 1000 people by the time the new warehouse is fully operational, which is scheduled for the fourth quarter of this year.

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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 1600 stores with the total area of 1.4 million m2. Based on a global distribution network located in 3 countries, it 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.

Salon Sinsay

First quarter of this year at LPP marked by intensive development of Sinsay brand and significant sales growth despite the withdrawal from the Russian market

•In Q1 2022/23, revenues of the Polish clothing producer increased by over 67% YoY, exceeding PLN 3bn (data excluding operations in Russia).

•High revenues of LPP Group in Q1 2022/23 resulted from the growing popularity of Sinsay brand in both channels.

•The past quarter, despite the suspension of online sales in Ukraine and Russia, brought LPP nearly PLN 1bn in e-commerce revenue and continued steady growth of online sales.

•The company once again achieved higher revenues from abroad, which in Q1 2022/23 already accounted for 57% of the Group’s revenue.

•After a temporary suspension of sales operations in Ukraine, LPP is back to business in that country – resuming e-commerce deliveries and stationary sales operations to a limited extent.

The first quarter of the current fiscal year at LPP (February-April) was strongly affected by the war going on across the eastern border. For security reasons, the company temporarily suspended its operations in Ukraine, and at the end of April, after previously halting its stationary and online sales in Russia, it took a directional decision to sell its entire business in this country. Consequently, as at the end of April this year, the company had 1760 physical stores in 25 markets, and the online offer was available in 32 countries. The war in Ukraine and the related unfavourable USD exchange rate, as well as discounts on LPP goods originally destined for eastern markets, also affected the gross margin, which fell to 53.3%. Despite this difficult situation, the company performed well financially. A flexible approach and agile operations in the area of the company’s development strategy ensured a net profit of PLN 268m already in the first quarter. At the same time, revenue from sales exceeded PLN 3 bn, which means an increase in the Group’s revenue by over 67% YoY[1].

– We consider maintaining high sales dynamics in the first quarter of the year, given such difficult conditions, as a good sign for the near future. As the financial figures indicate, even leaving Russia – such an important market for LPP – does not pose a threat to the company’s development. Despite the lack of sales operations in this country and the still limited operations in war-torn Ukraine, the Group’s total revenues increased by 29% YoY, and after excluding data from the Russian market in both quarters compared, we can speak of a 67% increase. This shows that shifting the focus of our activities towards Southern and Western Europe is the right decision. Customers have reacted enthusiastically to the collections of our brands, which can be seen in the almost twofold increase in revenues from European markets – comments Przemysław Lutkiewicz, Vice-President of the LPP Management Board.

The record-breaking turnover growth in Europe, at 98% YoY, allowed the Gdańsk-based company to compensate for the loss caused by the closure of stores in Russia. As a result, total revenues from abroad again exceeded those generated in Poland and accounted for 52% of the Group’s total revenues. Good sales, especially in countries such as Romania, the Czech Republic and Germany, and on the domestic market, which recorded a 60% increase YoY, are the effect of Sinsay’s dynamic development. The company set its sights on strengthening the brand position both within the physical stores network in Poland and abroad, as well as in e-commerce.

– In the first quarter of the year, total revenues of our youngest brand, Sinsay, which was higher abroad than in Poland, increased by almost 63% YoY, and accounted for almost 40% of the Group’s revenues. On the one hand, this is the result of intensive omnichannel expansion of the brand in Poland, but also abroad. On the other hand, it is a positive effect of the natural increase in the popularity of value-for-money segment offers in the current economic situation. At the same time, we observe consumers’ growing interest in more expensive premium collections of Reserved brand. A recovery in demand for formal clothing among women is also noticeable, as evidenced by the nearly 48% YoY increase in sales at Mohito. All that indicates a gradual return by customers to their old, “pre-pandemic” shopping habits – explains Przemysław Lutkiewicz, Vice President of the Management Board of LPP.

The practically complete lifting of sanitary restrictions in the past quarter encouraged customers to return to shopping in the physical stores chain. Despite these changes, the company maintained a stable growth rate in the online channel YoY, recording revenue of almost PLN 1bn. The majority, 72%, of purchases were made via mobile devices. The highest increase in e-commerce sales, by almost a quarter, was seen in the European market, due to the launch of Sinsay online stores in Greece, Spain and Italy in April. This allowed the company to offset a significant YoY decline in online sales in eastern markets, associated with the closure of stores in Russia and the temporary suspension of trade operations in Ukraine. However, in response to an appeal by the Ukrainian authorities, the company has resumed business operations in that country.

–  Following the recommendations of the Ukrainian authorities, in their efforts to maintain the smooth functioning of the economy, where possible, in April we restored the operation of our e-store in selected areas of the country. Orders are carried out to a limited extent, with delivery only to strictly defined collection points and on the basis of prepaid transactions. Also in the first quarter, we restored the operation of some of our physical stores and resumed supplying them. This applies mainly to western Ukraine and areas affected by warfare to a limited extent. This is our response to requests for support in maintaining  at least a semblance of the former reality in Ukraine – points out Przemysław Lutkiewicz, Vice-President of the Management Board at LPP.

While resuming business operations in Ukraine, LPP continues its activities supporting its employees and citizens from the war-stricken country. As part of the ongoing assistance, the company prepared financial and in-kind support worth a total of PLN 20m, which is allocated for such things as accommodation or legal aid, but also to support the aid activities of the LPP Foundation’s external partners.

For the Polish clothing company, the last quarter was also a time of logistics development. In February this year, the Distribution Centre in Brześć Kujawski became operational; together with the Distribution Centre in Pruszcz Gdański, it constitutes a key pillar of the LPP logistics network. The warehouse with the area of 75th m2 provides services up to 1000 stores simultaneously, employing over 700 people. In the first quarter, the construction works at the Fulfilment Centre in Podkarpacie also gained momentum. The new e-commerce warehouse, which is scheduled to be launched in the fourth quarter of this year, is to support the service of neighbouring markets such as: Hungary, the Czech Republic, Germany, Slovakia, Ukraine, and partly also Poland.

As part of its sustainable development strategy, the company also continued to work on the preparation of its decarbonisation strategy. With this in mind, last year it self-calculated its carbon footprint in all three scopes in line with the GHG Protocol guidelines. This was the first step before the company joined the global Science Based Targets initiative. Thanks to this move, LPP, as the first Polish company representing the clothing industry, will submit the developed decarbonisation goals to scientific verification this year. Professional scientific assessment of the strategy in line with SBTi methodology is to help the Polish company achieve climate neutrality by 2050.

[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. Based on a global distribution network located in 3 countries, it 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 1Q22/23 videoconference, 15th June, 12.00 pm CEST

Dear Sir or Madame,

LPP, the leading CEE fashion company, has the pleasure to invite you to participate in its videoconference, on Wednesday, 15th June, 12.00 pm CEST.

The CFO, Mr Przemysław Lutkiewicz and IR Manager Magdalena Kopaczewska, IR Manager will comment on the company’s 1Q22/23 numbers and developments.

Videoconference in English will be available under the following link:

https://platforma.livingmedia.pl/lpp/210422003/

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 nearly 1700 stores with the total area of over 1.4 million m2. Based on a global distribution network located in 3 countries, it 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.

Distribution centre in Brześć Kujawski is now fully operational

Even 8m items of clothing and accessories per week – that is how much the recently launched LPP Distribution Centre in Brześć Kujawski can handle. The new facility, with a storage capacity of up to 40m items, has been equipped with automation solutions allowing for a simultaneous servicing up to 1000 stores. Over 700 people have been already employed at the centre and provided with a modern and friendly workplace and comfortable commuting conditions. The facility has been designed with sustainable construction standards in mind and has obtained BREEAM certification.

LPP’s strategic investment in Brześć Kujawski is a facility which became operational in February this year in a three-shift system with a staff of 700.

– We started the investment in January last year and after less than 1.5 years we can talk about approaching the full operational efficiency of the facility. Thanks to the implemented solutions in the area of warehouse automation, the centre ensures a high standard of service for our shops and next to the Distribution Centre in Pruszcz Gdański it constitutes a key pillar of the LPP logistics network – explains Sebastian Sołtys, Logistics Director at LPP.

The centre is equipped with two sorters with a unique drop structure, enabling the service of up to 1000 stores simultaneously.

– In our new distribution centre, we opted for an innovative solution in terms of sorter technology. The engineering experience of the Dutch manufacturer of this type of equipment, supported by several weeks of tests, allowed us to develop a sorter design tailored to the needs of LPP. The newly patented solution in the area of pneumatics allows us today to maintain very high efficiency of the sorting process in a continuous mode, while increasing the efficiency of storage space use. It is worth noting that the innovative pneumatic patent is also very quiet, which increases the comfort of working with this type of equipment – informs Michał Moteka, Process and Automation Development Manager at LPP.

The automation of operations also significantly improves the order picking process for the stores. Owing to this, during the first two months of its operation the warehouse in Brześć Kujawski distributed over 300 thousand cartons with LPP brand collections.

The new warehouse also features an automated labelling process and carton forming and closing machines, which increase production efficiency and guarantee intuitive and safe handling.

The centre’s 1.8-kilometre conveyor system is equipped with solutions for packaging recovery and reuse. Service support is provided by a fleet of over 70 forklift trucks, for which a modern battery room with a battery queuing system has been prepared.

The entire facility operates with the support of the WMS (Warehouse Management System) managing the processes of the flow of goods, work of people and logistics equipment.

– Thanks to these solutions, the 75,000 m2 warehouse can ensure the distribution of up to 8m items of clothing and accessories per week. In addition, a racking system with a storage capacity of 40m pieces of clothing, or up to 67th pallets of goods, was installed in the facility. Such a number of pallets, if arranged linearly, would reach a total length of approximately 60 km, which corresponds to the distance between Włocławek and Toruń – notes Mariusz Adamusiński, Head of the Distribution Centre in Brześć Kujawski.

An important point in optimising the operation of LPP’s logistic facilities is reducing their environmental impact. The warehouse in Brześć Kujawski is currently undergoing the BREEAM sustainable construction certification process. The facility has been equipped with, among others, a recuperation system in the office rooms, which allows for up to 95% heat recovery. Moreover, thanks to the installation of photovoltaic panels on the roof with a total power of 1,5 MW and an area of over 7th m2, the building is powered by renewable energy. LPP attaches great importance to the comfort of its employees; therefore, already at the stage of designing the distribution centre, one of the priorities was to ensure the most favourable working conditions. Optimization of lighting, heating, air conditioning and ventilation installations thanks to an advanced BMS system, as well as wide corridors and glazing of the warehouse are only some of the available facilities in place for everyone’s convenience. The company has also designated its own bus depot with 5 platforms and 17 parking spaces, and created its own transport network, making it easier for people from the surrounding areas to reach the workplace.

– The Distribution Centre in Brześć Kujawski is a modern facility, designed and built in line with our strategic assumptions. We are glad that our activities supported by experience have enabled us to develop optimal logistic solutions while fulfilling the objectives of sustainable development – concludes Sebastian Sołtys.

Striving to achieve full operational capacity in the facility, LPP continues employee recruitment processes. Due to the infrastructural solutions applied at the distribution centre, more specialists are needed, especially at the maintenance department, including electricians, electromechanics and maintenance technicians. Find out more at https://www.lppsa.com/Brzesc.

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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 nearly 1700 stores with the total area of over 1.4 million m2. Based on a global distribution network located in 3 countries, it 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.

New LPP e-commerce warehouse in the Podkarpacie region is growing

Construction works on the LPP investment in Jasionka near Rzeszów, which started in January, are gaining momentum. After completing part of the earthworks, reinforced concrete and external installations, the construction of the new e-commerce warehouse of the Polish clothing manufacturer has entered another stage. The company has already started assembling concrete pillars for the steel structure of the roof, scheduled for May this year. Completion of the entire 69,000 m2 facility is still planned for 2022.

In the Podkarpacie region, intensive construction works are underway on a new warehouse dedicated to handling online orders of the Gdańsk-based clothing company. The investment, designed with due care for sustainable construction standards, is expected to streamline the logistics network as well as increase the company’s operational efficiency and current warehouse space.

– We are currently entering the next phase of preparing the new FC Podkarpacie facility. Thanks to the involvement of all our construction partners the investment process is proceeding according to schedule and it seems that the warehouse in Jasionka will be put into operation according to our assumptions still this year – informs Kamil Kawałek, LPP Logistics Network Development Manager.

Following the completion of earthworks and stabilizing the ground for the warehouse construction, the installation of concrete structural pillars has started on the currently laid foundations. So far, about 40%t of the planned 400 pillars have already been installed. This stage will take 8 weeks, and the completion of this part of the works is expected at the end of May 2022. The construction of the pillars will allow the preparation of the steel structure of the roof to begin, and then in June, the roof and walls of the facility will be closed up. In parallel, the installation of the rainwater drainage and fire protection systems is currently underway, and activities related to the construction of the external networks are continuing.

– Once completed, the new facility will increase LPP’s warehouse space to over 465,000 m2. The investment is the next step in the development of our logistics network and an important element of our company’s plans. The new Fulfillment Center will streamline many distribution processes in this part of Europe. We also believe that our long-term presence in the Podkarpacie region will bring benefits for the whole region by, among other things, supporting the local labour market – comments Sebastian Sołtys, Director Global Logistica at LPP.

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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 2200 stores with the total area of over 1.8 million m2. Based on a global distribution network located in 4 countries, it distributes clothing and accessories to 3 continents every year. LPP plays another important role as it employs 32 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.

Summary of LPP’s financial results for 2021/22

• Last year at LPP saw high, double-digit sales growth and the continuing trend of deferred demand in all markets.

• In 4Q2021/22, the Polish clothing company generated sales exceeding PLN 4bn and closed last year with PLN 14bn in revenue, which means a YoY increase of nearly 80%.

• The resumption of the consumer habits, as well as the adopted pricing policy and favourable trading conditions for orders contributed to LPP’s net profit for 2021/22 at the level of PLN 954m.

• The growth rate of e-commerce sales remained at a high double-digit level, and in 4Q2021/22 amounted to +63.6% YoY, exceeding PLN 1.2bn in revenue. In annual terms, revenues from this channel amounted to nearly PLN 4bn and accounted for as much as 28% of the Group’s revenues.

• In 2021, the Gdańsk-based company strengthened its presence in the Balkan region, debuting with its brands in another market –the 7th in this region – North Macedonia.

• Another year in a row, foreign revenues exceeded domestic ones and in 4Q2021/22 they already accounted for over 60% of the Group’s revenues.

After difficult periods of deterioration caused by the effects of the pandemic, the past year brought a significant recovery to the Gdańsk-based company and was one of the best in terms of financial results. Despite the many subsequent challenges faced by the industry, especially in the area of logistics and disruptions in the supply and raw materials market, LPP took advantage of the so-called deferred demand trend, which persists in practically all markets. As a result, the Polish company ended 4Q2021/22 with a record result of over PLN 4bn in revenues accompanied by a YoY sales increase of nearly 97%, generating annual revenue of PLN 14bn and a profit of PLN 954m. Such record-breaking sales results at the end of the year and a high margin of 60% were achieved thanks to good trading conditions for ordering collections for the autumn/winter season, the growing share of exports and the pricing policy adopted by the company – which assumed limiting the level of sell-offs while at the same time encouraging customers to buy new collections of LPP brands at the initial price.

– The past year, despite a slow return to normality, was not devoid of challenges we had to face. Disruptions in supply chains and difficulties in obtaining raw materials for production, combined with rising inflation, did not foster optimism. We are therefore pleased that we managed to close the previous year with such a good financial result. Despite the turmoil, we once again proved to ourselves, our employees and our business partners that we are a strong organisation, ready to handle different market scenarios. What is more, today, in the face of the loss of a significant part of our revenue as a result of military operations behind our eastern border, we see great potential for growth in the remaining regions of Europe, which, in turn, allows us to think about the future of LPP with optimism – comments Przemysław Lutkiewicz, vice-president of the Management Board of LPP.

The effects of deferred demand were reflected in LPP’s sales results already from the first quarter of last year in all regions where the company operates and this trend continued consistently throughout the subsequent months. The past year was once again marked by more revenues generated abroad for all LPP brands. The high dynamics of sales growth in Europe, amounting to over 80% in 4Q2021/22, with very good results in the markets of South-Eastern Europe and as much as fivefold increase in sales in the pan-European online store, are a positive sign for the company in light of the new geopolitical conditions in Eastern Europe. The return of customers to their old shopping habits was visible both in physical stores and in e-commerce, which note a double-digit growth throughout the year and in 4Q2021/22 already accounted for 30% of the Group’s revenues, reaching nearly PLN 4 bn in annual terms. The dynamics of growth in this channel prompted the company to enter another e-commerce market in Bulgaria. The past year was also marked by the continuing trend of increasing interest in shopping via mobile devices, which in 4Q2021/22 already accounted for over 73% of online purchases. This, in turn, prompted the company to accelerate its work on launching mobile applications, which can already be used by consumers interested in the offer of Reserved and Sinsay brands.

Pursuing the concept of multi-channel sales, the Polish clothing company has also consistently implemented its plans for the development of the stationary network, which at the end of January 2022 already comprised 2,244 stores with a total area of over 1.8m m2, giving a YoY increase of 31.5%. RFID technology has also proved to be an important supporting factor in strengthening the omnichannel model, whose effectiveness in Reserved has prompted the company to speed up the implementation of electronic tags in Mohito, Cropp and House brands.

The company’s stable financial standing and positive forecasts regarding sales in the omnichannel model allowed LPP to implement its investment plans. The Polish clothing company’s capex on the development of its sales network, distribution, offices and IT solutions totalled PLN 1,325m in 2021/22, which means more than 60% capex increase as compared to the previous year. One of the key areas, apart from the expansion of the stores network, was the consistent implementation of the targets set in the area of logistics. Owing to that, at the end of last year LPP completed the construction works on a new Distribution Centre in Brześć Kujawski.

The experiences of the previous year relating to the effects of the pandemic and the disruptions in supply chains that accompanied the industry for many months made the company change its inventory management policy. The 86% YoY increase in the level of warehouse stocking is also a result of the further development of the sales network planned by LPP.

– The company’s stable standing allowed us to take decisions that guarantee further safe development of the Group and to change the direction of development from the war-stricken East to the West of Europe. We forecast that the new strategy based on development in those EU countries where we see growth potential for our brands, will enable us to generate revenues of PLN 16bn in the current financial year – explains Przemysław Lutkiewicz.

The 13% sales increase planned by the company for this year will be achieved in particular through the intensive development of Sinsay brand. The sales network of the youngest brand in LPP’s portfolio will see expansion by further 440 stores this year, thus becoming the second – besides Reserved – pillar of development for the Polish clothing manufacturer. – The capex assumed for the current financial year, amounting to PLN 1bn, is not only the outcome of our plans in the area of stationary network development and the opening of over 500 new stores, including the debut of our brands in Albania, planned for this year. Investment in the expansion of the distribution network and technological support in logistics will remain an integral part of strengthening omnichannel sales. In this respect, one of the key projects for this year is the construction of a new Fulfilment Centre-type warehouse in Podkarpacie region, which will constitute a significant reinforcement of operating capacities in view of the planned further growth in e-commerce – adds Przemysław Lutkiewicz.

The past year at LPP brought not only good reception of the collection by the customers but also recognition in the capital market as regards the effectiveness of the implemented business goals. The company was awarded the title of the WIG20 Index Company of the Year in the Byki i Niedźwiedzie [Bulls and Bears] competition of “Parkiet” stock exchange and investors’ magazine. LPP Group’s results also translated into a significant economic contribution to the Polish economy. Last year, the Gdańsk-based company contributed to the state budget by levies equivalent to almost PLN 1.6bn.

At the same time, the financially stable year allowed the company to consistently fulfil its commitments towards sustainable development, which are summarised in the latest edition of the LPP integrated report entitled “With ESG brought to the fore”. In order for the company to implement its strategy is to gradually increase the share of collections from the Eco Aware line – made from environmentally friendly materials or as part of a sustainable process. Last year, they accounted for over a quarter of the offer of brands from LPP’s portfolio, including every 5th item of Sinsay. The implemented solutions also rendered it possible to reduce the consumption of single-use plastics by a further 445 tonnes, which means a reduction of 1015 tonnes of this raw material in LPP packaging since 2017. The past year also saw a continuation of the work undertaken by the Polish company to improve safety and production conditions in its suppliers’ factories, as the company allocated further PLN 5.6m to this end, and since the beginning of its activities pursuing this direction it has already invested nearly PLN 35m in this area. Activities in the field of responsible manufacturing also include a continuation of the Eco Aware Production scheme, which has already covered 30% of the factories in South Asia.

– For LPP, the last few years have been a period of many challenges, which often required quick decisions and strategic changes in our development plans. What remains unchanged are our commitments to people and the environment, which we try to fulfil consistently. Being aware of our impact on our environment, regardless of the market situation, we are not indifferent to climate issues or to people in need, and we are pursuing our social and environmental commitments on an ever-growing scale. By joining new international initiatives, such as Canopy for the protection of forest resources, or Cotton made in Africa, a globally recognised standard for sustainable cotton cultivation in Africa, we want to be an active participant in activities aimed at developing best practices and production standards supporting sustainable development of the textile industry – concludes Przemysław Lutkiewicz.

The full version of LPP’s integrated report for the 2021/22 financial year is available at https://www.lppsa.com/en/sustainable-development.

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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 manages 5 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 2200 stores with the total area of over 1.8 million m2. Based on a global distribution network located in 4 countries, it distributes clothing and accessories to 3 continents every year. LPP plays another important role as it employs 32 thousand people in its offices and retail structures in Poland, and in the countries of 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 4Q21/22 videoconference, 21st April, 11.00 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, 21st April, 11.00 am CET .

The CFO, Mr Przemysław Lutkiewicz, will comment on the company’s 4Q21/22 numbers and developments.

Videoconference in English will be available under the following link:

https://platforma.livingmedia.pl/lpp/210422003/

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

Annual report and presentation will be published on 20th April.

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LPP is a Polish family company, one of the most rapidly growing in the apparel industry in the Central and Eastern Europe region. For 30 years, it has been successful in Poland and abroad, selling collections in 25 markets, including such prestigious capitals as London, Berlin and Tel Aviv. The online range is available in 30 markets. LPP manages 5 fashion brands: Reserved, Cropp, House, Mohito and Sinsay. At the end of 2000, the company had a network with over 2,000 sales outlets of a total surface exceeding 1.7 million m2. Based on the global supply network, the Polish clothes manufacturer distributes over 259 million clothing items to three continents per year. LPP also has an important role in creating jobs for nearly 27,000 people in offices and sales structures in Poland, Europe, Asia and Africa. The company is quoted on the Warsaw Stock Exchange under the WIG20 Index and belongs to the prestigious MSCI Poland Index.

LPP hailed the best listed company of 2021 in the PULS BIZNESU ranking

For the third time in the over 20-year history of the Puls Biznesu ranking of the best companies listed on the Warsaw Stock Exchange, LPP took the top step of the podium, receiving the honourable title of Listed Company of the Year.

After almost a decade, LPP returns to the top of the ranking organized by the editorial team of Puls Biznesu concerning the best companies listed on the Warsaw Stock Exchange. Importantly, throughout this period, with the exception of the difficult 2020, it has never left the top ten.

Strong share price growth, prudent management, including a stable gross sales margin and solid operating cash flow are the key elements that gained recognition in the Puls Biznesu ranking. The evaluators also pointed to the importance of rebuilding sales per square metre of stores, the significant share of revenues in the e-commerce channel, the increase in retail space and improved profitability.

As a result, LPP’s achievements in this area were evaluated very highly, as confirmed by almost 90 out of 100 possible points granted.

Overall, the experts took into account the competences of the management board, development perspective, innovativeness of products and services, investor relations and the successes of 2021. In the last two categories, LPP was ranked 4th.

The Listed Company of the Year is one of the oldest rankings of this kind, organized for 23 years by the editors of Puls Biznesu. Previously, LPP won the highest prize in 2011 and 2012. The results of the contest are the effect of voting among capital market specialists – analysts, brokers and investment advisers representing brokerage houses and offices, insurance companies, pension, investment and trust funds, capital departments of banks and consulting companies. The assessment covers companies included in WIG20, mWIG40 and sWIG80 indices.

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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 on 26 stationary markets, including in such prestigious capitals as London, Helsinki or Tel Aviv. The online offer is available on 31 markets. LPP SA manages five fashion brands: Reserved, Cropp, House, Mohito, and Sinsay. The company has a chain of over 2000 stores with the total area of over 1.7 million sq.m. On the basis of a global supply chain, the Polish clothing producer distributes over 259 million pieces of clothing to three continents. LPP plays another important role as it employs 27 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.

New directions for the LPP business strategy. In 2023 the company will debut in three new markets

• The financial condition of the Polish clothing company remains stable. LPP’s estimated revenue for 2022/23, excluding the Ukrainian and Russian markets, may exceed PLN 16 billion, which implies an increase in sales by 13% y/y.

• The Gdańsk-based company also forecasts further growth in the e-commerce sector, where sales should exceed PLN 5 billion by the end of the current financial year.

• The company plans a successive development of its retail footprint and over 500 thousand sq m of new retail space.

• In 2023 LPP will debut on three new markets by opening its own Sinsay brand stores in Italy and Greece, as well as Reserved franchise stores in Cyprus.

• The company intends to continue the development of the Reserved retail chain in Germany and Great Britain.

The decision to suspend business activity in Ukraine and to discontinue all sales, both online and in retail stores on the Russian market, means a nearly 25% loss of revenue for LPP. As a response to the difficult and unstable situation in the region, which has so far been one of the most promising for the company, the company decided to set new directions in its development strategy. LPP’s business plans will include activities aimed at increasing the availability of the brands offered by the Polish clothing manufacturers in EU countries, both in terms of increasing the retail footprint of the company’s stores in current markets and further foreign expansion in Europe.

– After the difficult times of the pandemic, we faced new challenges related to the considerable loss of the sales network. Despite this, the company’s condition remains stable, and the expected revenues for the current financial year amount to over PLN 16 billion, which allows us to think about the future of LPP with optimism. On the other hand, given the inability to predict the future situation in war-stricken Ukraine, we have decided to focus our development on the European Union countries, where we are already present in the market. At the same time, we want to establish ourselves in new markets, especially in Southern Europe, where we see a development potential for our brands. We believe that these particular decisions and ambitious plans for further international expansion will allow us to maintain the Group’s stable condition, regardless of the situation in the Eastern markets,” – says Przemysław Lutkiewicz, Vice-President of LPP.

During the current financial year, the Gdańsk-based company plans to open over 500 new stores with a total retail area of around 500,000 m2. Simultaneous development activities, conducted both on new and existing markets, are intended to compensate for the losses resulting from the military conflict behind the eastern border and to strengthen the market positioning of all LPP brands in Europe, with particular emphasis on the Sinsay brand.

– Our immediate goal is to focus on developing our youngest brand and, still this year, we plan to open as many as 440 Sinsay stores. By doing so, we want to develop two solid pillars of the company – Reserved, our flagship brand, and Sinsay, and to implement further expansion plans from this stable position. Yet we do not limit our activities to these two brands only. By the end of this year, our sales network will have been expanded by another 100 stores of our other brands,’ – emphasises Przemysław Lutkiewicz.

Plans to introduce the full range of LPP brands to Albania in 2022 are also in progress, while in 2023 the company wants to debut in three new markets. The Sinsay brand will open its stores in Greece and Italy, and the first Reserved franchise stores will open in Cyprus. The development of the Reserved retail chain in Germany and Great Britain will also be continued.

– The considerable interest shown by Italian customers in our pan-European online store has encouraged us to open Sinsay retail stores in that country. Equally promising is the Greek market, which we treat as a logical direction for further expansion in the Balkans. We also want our Reserved brand to reach customers in Cyprus through franchise stores. What is important, as we observe a growing interest in the Sinsay home line, we do not exclude the possibility of extending the Reserved product range in this direction. Concurrently, we want to expand the Reserved online offer so that it meets the expectations of both current and new clients even better,’ – declares Lutkiewicz, the Vice-President of LPP.

This year, the company will not only focus on the expansion of the foreign retail store network, but also on the development of its e-commerce branch, which in the fourth quarter of 2021/22 reached 30% of the total sales. This year, according to the company’s estimates, the value of revenue from online sales may reach even PLN 5 billion. The company sees great potential in this area in countries such as Austria, Italy and Germany.

New circumstances and shifts in the global economy have forced the company to refocus its business activities from the eastern markets to the central, southern and western parts of Europe. However, it does not change the adopted assumptions to strengthen LPP as a fully omnichannel company, while using the assets developed during the pandemic. Similarly to the previous years, the company focuses on a flexible approach to customer needs and expectations, which is reflected in the announced development plans.

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LPP is a Polish family company, one of the most rapidly growing in the apparel industry in the Central and Eastern Europe region. For 30 years, it has been successful in Poland and abroad, selling collections in 25 markets, including such prestigious capitals as London, Berlin and Tel Aviv. The online range is available in 30 markets. LPP manages 5 fashion brands: Reserved, Cropp, House, Mohito and Sinsay. At the end of 2000, the company had a network with over 2,000 sales outlets of a total surface exceeding 1.7 million m2. Based on the global supply network, the Polish clothes manufacturer distributes over 259 million clothing items to three continents per year. LPP also has an important role in creating jobs for nearly 27,000 people in offices and sales structures in Poland, Europe, Asia and Africa. The company is quoted on the Warsaw Stock Exchange under the WIG20 Index and belongs to the prestigious MSCI Poland Index.