LPP’s 4Q20/21 videoconference, 29th April, 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 Thursday, 29th April, 12.00 pm CEST.

The CFO, Mr Przemysław Lutkiewicz, will comment on the company’s 4Q20/21 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 SA is a Polish family business and one of the fastest growing clothing companies in the region of Central and Eastern Europe. For over 25 years it has been successfully operating in Poland and abroad, offering its collection in traditional stores already on 25 markets, including in such prestigious capitals as London, Berlin, Tel Aviv or Moscow. LPP SA manages five fashion brands: Reserved, Cropp, House, Mohito, and Sinsay. The company has a chain of over 1800 stores with the total area of over 1.3 million sq.m. The online offer of the brands collections is available on 29 markets. On the basis of a global supply chain, the Polish clothing producer distributes over 265 million pieces of clothing to three continents. 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 doubles its warehouse space in Romania

Due to the growing importance of the Romanian market in e-commerce sales, LPP has proceeded to expand its Fulfilment Centre warehouse near Bucharest. Completion of the works and commissioning of the new facility is scheduled for the third quarter of this year. The doubling of the area of the already operating warehouse will allow the Polish clothing manufacturer to handle online orders from customers in both Romania and neighbouring countries, including Bulgaria, where the company plans to launch online sales later this year.

LPP has decided to expand its Fulfilment Centre, launched in 2019 near Bucharest. The warehouse, which handles online orders of LPP brands, will gain an additional 21,000 m2 upon completion of construction works in the third quarter of this year. This means that the Gdańsk-based company will double its warehouse space available in Romania. The decision to expand the existing facility was driven by the growing role of the local market in the group’s e-commerce sales.

– The works on the expansion of our warehouse in Romania, which have been in progress for over a month, are well advanced. The installation of the concrete pillars, which has just been completed, allows us to start the next stage of construction, namely the preparation of the steel structure of the roof. These works will take several more months. After their completion, we will have twice as much warehouse space in one of the fastest growing markets in terms of online sales growth for our brands – comments Sylwester Dmytriwski, Logistics Regional Network Director, LPP.

The Fulfilment Centre, located near Bucharest, now enables the efficient handling of orders for customers from this country, including offering facilities such as next business day delivery. The expanded warehouse, with a total area of 42,000 m2, will eventually serve not only online orders from Romania, but also from neighbouring countries. The new facility will also carry out cross-dock operations to supply the LPP brick and mortar stores network in Romania and Bulgaria, which currently comprises a total of over 100 stores in both countries.

– Southeast Europe remains an important region for us, also in terms of online sales. One of the fastest growing e-commerce markets in this part of the continent is Romania, which has become the second country after Poland with the largest share of our group’s online revenues. We hope that the revival in this channel, particularly visible in Romania, will continue and doubling the current warehouse space will further strengthen this trend – adds Sylwester Dmytriwski.

The expansion of the warehouse in Romania is, in addition to the e-commerce warehouse currently under construction in Russia and the distribution centre in Brześć Kujawski, another investment aimed at strengthening and developing LPP’s logistics. Upon completion of all three facilities, the group’s total warehouse space will increase by 50%, i.e. from the current 253,000 m2 to 378,000 m2.

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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 over 25 years it has been successfully operating in Poland and abroad, offering its collection in traditional stores already on 25 markets, including in such prestigious capitals as London, Berlin, Tel Aviv or Moscow. LPP SA manages five fashion brands: Reserved, Cropp, House, Mohito, and Sinsay. The company has a chain of over 1800 stores with the total area of over 1.3 million sq.m. The online offer of the brands collections is available on 29 markets. On the basis of a global supply chain, the Polish clothing producer distributes over 265 million pieces of clothing to three continents. 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 construction of the LPP distribution centre in Brześć Kujawski gains momentum

Construction works on the site of LPP’s investment in Brześć Kujawski, which began in January this year, are gaining momentum. Almost eight weeks after the announcement of the general contractor selection, the company from Gdańsk has already completed part of the earth-, reinforced concrete works and external installations. In the second week of March, the company also started assembling concrete pillars which will allow the next stage of the works – preparation of the steel structure of the roof – to begin at the end of the month.

One of the key investments of a Polish clothing manufacturer has entered the next stage of implementation. After the initial preparation of the location, fencing of the site and activation of access control and technical facilities, the company started the main part of the construction works. Therefore, after almost two months from the start of activities on the site of the future distribution centre, 70 per cent of the ground has been levelled and reinforced for the purpose of flooring works. The company is also in the process of performing external installations and reinforced concrete works. In the first week of March, the erection of structural columns began. According to the approved schedule, up to 20 of those will be erected daily, and the entire assembly will be completed before Easter.

– The investment process in Brześć Kujawski is going according to plan. Despite the temporary unfavourable weather conditions, which caused freezing of the ground in February and held us back for over three weeks, we resumed work in the first days of March. Parallel to the earthworks, we are currently installing concrete pillars, of which 123 out of the planned 400 have already been installed. Once this stage is completed, weather permitting, we will have an important moment of closing the facility with walls and a roof – comments Łukasz Piwoński, Administrative and Technical Director, LPP.

The assembly of the roof structure and the installation of the walls of the warehouse part of the new LPP distribution centre should already start at the turn of March and April. The milestone in the schedule will be the flooring, the most important element for the future technological facilities, scheduled for the end of May.

– Despite the still changeable weather, our entire investment team is currently focused on keeping up with the current schedule. I am convinced that thanks to the involvement of the general contractor, architects and investor supervision, the announced completion date in the fourth quarter of this year will be maintained – adds Łukasz Piwoński.

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ABOUT Brześć Kujawski Distribution Centre

The construction of the Distribution Centre in the Brześć Economic Zone is the next step in the development of the LPP’s supply chain. The state-of-the-art facility will enable the diversification of logistics operations and will strengthen the currently available capacities of the supply and distribution network of the Gdańsk-based company. Its area will comprise 75 thousand m2. The centre will support the operation of LPP’s brick and mortar stores in 25 markets, with distribution of up to 8 million pieces of clothing and accessories per week. In the first phase of its operation, the facility will employ about 500 people. The launch of the Distribution Centre in Brześć Kujawski is planned for the first quarter of 2022.

LPP SA is a Polish family business and one of the fastest growing clothing companies in the region of Central and Eastern Europe. For over 25 years it has been successfully operating in Poland and abroad, offering its collection in traditional stores already on 25 markets, including in such prestigious capitals as London, Berlin, Tel Aviv or Moscow. LPP SA manages five fashion brands: Reserved, Cropp, House, Mohito, and Sinsay. The company has a chain of over 1800 stores with the total area of over 1.3 million sq.m. The online offer of the brands collections is available on 29 markets. On the basis of a global supply chain, the Polish clothing producer distributes over 265 million pieces of clothing to three continents. 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 to launch another e-commerce warehouse in Russia

LPP has signed a contract to lease warehouse space in Moscow’s industrial park – “PNK Park Zhukovsky”. Built on behalf of the Gdańsk-based company, the 30,000 m2 Fulfillment Center will be dedicated to handling e-commerce sales in Russia. The new facility in LPP’s distribution network, located 19 km from the Moscow ring road, is yet another step towards strengthening multi-channel sales of the Polish clothing manufacturer.

LPP has signed a long-term lease agreement concerning space in a Moscow industrial park with a Russian development company. The 30,000 m2 facility will serve as a Fulfillment Center in the logistics network of the Gdańsk-based company. The warehouse, built within the“PNK Park Zhukovsky” complex situated 19 km from the Moscow ring road, due to its location, will make it possible for the company to significantly improve the handling of customers’ online orders on one of its key markets.

– LPP’s strategy for omnichannel development in Russia is tantamount to new challenges we will be facing related to network expansion and continuous improvement of logistics infrastructure. We have long seen a strong interest in our online store offer among customers in this region, and the pandemic period has further reinforced this trend. Investment in a modern Fulfillment Center in the “PNK Park Zhukovsky” complex is therefore an important step towards achieving our goals of dynamic sales growth in the e-commerce channel – comments Sebastian Sołtys, Logistics Director, LPP.

The first stage of the investment, which is being carried out by the PNK Group on behalf of LPP already in the current season, involves the construction of a facility with an area of 30,000 m2. As agreed, the second phase will continue in 2022 in line with the growing space needs of the Gdańsk-based company.

The Polish clothing manufacturer has had a 15,000 m2 Distribution Centre in Russia since 2012, which provides supplies for more than 400 LPP’s brick and mortar stores in Russia and Kazakhstan. In 2017, the company expanded its logistics network and launched a 17,000 m2 warehouse near Moscow dedicated to online sales. With the new facility, LPP plans to triple the number of online orders processed in the region.

– The first talks about lease in this location started even before the pandemic. And this, in turn, has significantly changed the balance of power between our sales channels by increasing the role of e-commerce. With this in mind, it was particularly important for us that the facility should cater to the new needs of our logistics infrastructure, have an optimal central location and provide the opportunity to dynamically increase the space in this complex. The new Fulfillment Center warehouse, which will be located in close proximity to the Russian capital, meets these expectations – explains Sebastian Sołtys, Logistics Director, LPP.

LPP’s investment in Russia is not the first one carried out in cooperation with the PNK Group. In 2019, the Polish company leased a 32,500 m2 industrial building in the PNK Sered complex in Slovakia. The Slovak Fulfillment Center handles online orders in the Central European region.

LPP has been developing its global sourcing and distribution network for years, with all of its warehouse space now totalling over 250,000 m2. The long-term investment of lease space in the PNK Zhukovsky facility is another step for the Polish company to implement its omnichannel strategy. As part of the transformation of logistics, technology and sales processes, the company fully integrated its sales channels last year. LPP’s presence in this location further facilitates the implementation of the company’s business strategy in the new retail reality.

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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 over 25 years it has been successfully operating in Poland and abroad, offering its collection in traditional stores already on 25 markets, including in such prestigious capitals as London, Berlin, Tel Aviv or Moscow. LPP SA manages five fashion brands: Reserved, Cropp, House, Mohito, and Sinsay. The company has a chain of over 1800 stores with the total area of over 1.3 million sq.m. The online offer of the brands collections is available on 29 markets. On the basis of a global supply chain, the Polish clothing producer distributes over 265 million pieces of clothing to three continents. 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 once again hailed leader in WIG30 companies’ communication with the market

LPP won first place in the WIG30 investor relations survey for the second time in a row. The winning result consisted of the highest rating awarded by financial institutions and a third place in the individual investor voting. Thus, the company confirmed its leading position as regards communication with the market. The investor relations survey conducted for the seventh time by Parkiet and Izba Domów Maklerskich [the Chamber of Brokerage Houses] is the biggest initiative of this sort in Poland.

The survey of companies’ communication with the market aims to raise the standards of investor relations of companies listed on the Warsaw Stock Exchange and to support the development of the domestic capital market. The annual survey of 30 biggest listed companies with the best liquidity in Poland consists of two parts – a survey among institutional investors and analysts and an online poll for individual investors. In the current, seventh edition, LPP from Gdańsk was hailed leader in the general ranking for the second time in a row. The company has been ranked in the top three for years.

– Our recipe for building good investor relations has for years been based on the fundamental principles of the capital market: transparency and equal access to information for all shareholders, as well as the efficiency and quality of information provided. Last year was full of challenges and required the Management Board to make many strategic decisions – as a listed company, we felt obliged to keep the market informed about them on an ongoing basis. In our opinion, this is the foundation of investor relations based on trust and reciprocity – says Magdalena Kopaczewska, Head of Investor Relations, LPP.

LPP, recognised by representatives of financial institutions as the company which communicates best with the market, achieved 4.92 out of 6 points, with the average of 4.1 points, and took first place in this part of the survey. In the small investors’ assessment, the company was ranked third – with a score of 3.7 points, with the average of 3 points.

More than a thousand people took part in this year’s survey, and the number of ratings exceeded 17 thousand. Representatives of 19 different financial institutions took part in the survey, including funds and brokerage houses (analysis departments), whose votes proved decisive for LPP’s victory in the overall ranking.

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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 over 25 years it has been successfully operating in Poland and abroad, offering its collection in traditional stores already on 25 markets, including in such prestigious capitals as London, Berlin, Tel Aviv or Moscow. LPP SA manages five fashion brands: Reserved, Cropp, House, Mohito, and Sinsay. The company has a chain of over 1800 stores with the total area of over 1.3 million sq.m. The online offer of the brands collections is available on 29 markets. On the basis of a global supply chain, the Polish clothing producer distributes over 265 million pieces of clothing to three continents. 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 is finalising the first stage of the expansion of its Fashion Lab complex. The company doubles the office space of its headquarters in Gdansk

The Pomeranian clothing company has commissioned a new building on Łąkowa street with a total area of 17,500 m2, doubling the area of its headquarters in Gdansk. The opening of the building completes the first stage of the expansion of the Fashion Lab complex, which is to consist of four office buildings and enable the presence of most of the Gdańsk-based teams in the same location in the Dolne Miasto district of Gdańsk. The completion of the entire investment is scheduled for 2027.

– The project to create the Fashion Lab campus on Łąkowa began back in 2015 with the complete modernisation of the company’s existing HQ in Gdańsk. Two years later, while embarking on the construction of the building we are now commissioning, the concept of creating an ecological complex of office buildings that would fit in with the architecture of this district of Gdańsk was created. This approach will allow us to concentrate most of the several thousand employees of LPP headquarters in one location. This solution goes hand in hand with the changes taking place in LPP as regards transition towards an omnichannel organisation, which requires close cooperation and fast flow of knowledge between our teams. At the same time, the idea of the campus we are embodying is meant to appeal to our employees – fashion and contemporary design enthusiasts. We want the space we create to reflect the spirit of LPP, combining art, fashion and business – says Jacek Kujawa, Vice-President, LPP.

Some of Reserved brand’s design teams and omnichannel department have already started working in the new facility. The industrial-style building was designed by JEMS Architekci in consultation with the conservation officer.

– We wanted the Fashion Lab complex to fit in with the historical image of the district by referring to the industrial traditions of the Dolne Miasto district. The new building recreates the frontage, i.e. the sequence of front buildings of Łąkowa street, maintaining the character of the pre-war buildings with the former Tobacco Factory, i.e. the current seat of the LPP HQ and the Rifle Factory – says Łukasz Piwoński, Administrative and Technical Director, LPP.

The building with a total area of 17,500 m2 is divided into an above-ground office space of 8,500 m2 and an underground part with a total area of 9,000 m2 – with a two-level garage. The structure, which is 18 metres high, is made of 15,000 m3 of concrete.

– It is as if we built a 10 km long concrete roadway from Łąkowa street to our Distribution Centre in Pruszcz Gdański. The weight of the steel used may also appeal to the imagination – the 1,200 tonnes built into the structure may be compared to the weight of 800 medium-sized cars – points out Łukasz Piwoński.

The company has been pursuing the objectives of its new sustainability strategy “For People For Our Planet” since 2020. One of its pillars consists in the sustainable development of the HQ buildings and sales network infrastructure. The aim is to maintain the standards of modern and sustainable construction that will meet BREEAM certification requirements. Therefore, already at the design stage, the company focused on pro-environmental solutions, deciding, among others, to install a greywater system, thanks to which rainwater is used to flush toilets in the building. Special reservoirs were also introduced to collect rainwater for watering green areas. In addition, chilled ceiling technology, present in 80% of the usable area of the building, was used as an alternative to standard air conditioning.

– Instead of using a traditional cooling agent, i.e. freon, we opted for a more ecological solution which uses water to this end. This method also eliminates the problem of microorganisms which, over time, appear in the air-conditioning ducts, and the aluminium tilt windows used everywhere, which allow ventilation of the rooms, additionally support ventilation – says LPP’s Administrative and Technical Director.

Green technologies present throughout the building also include energy-efficient lighting using LED lamps with intensity sensors. By adjusting the amount of light to external atmospheric conditions, they determine the optimum illumination of rooms, while at the same time reducing energy consumption. To further reduce energy consumption, the building’s automation is managed by a modern BMS (Building Management System). which controls energy, heating, ventilation and air conditioning in an integrated manner. For the sake of the comfort of the residential areas in the neighbourhood, the company also wanted to limit the noise generated by the ventilation equipment. To this end, all the technical centres are located in the basement of the office building.

The new office in the Fashion Lab complex is environmentally friendly, but also a functional and pleasant place to work. With the employees’ comfort in mind, a green courtyard with natural grass and four-metre-high trees was made, which creates a friendly, intimate atmosphere of a mini-park. The focal point of the entire campus will be a green square surrounded by hill-like elevations, in which terraces with work and relaxation zones will be formed. In addition, for the convenience of motorised employees, the new 9,000 m2 facility has a two-level underground car park for 112 cars, of which 8 spaces are planned for electric vehicles and equipped with fast chargers. The company will provide employees , for starters, with six cars as part of its Car Sharing service, of which more than 30% will be electric, with full booking access and smartphone operation.

The opening of the second facility completes the first stage of a long-term investment to create the LPP Fashion Lab complex in Gdansk, which will ultimately consist of 4 office buildings located on a plot of 14.4 thousand m2. It is expected to be completed by 2027.

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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 over 25 years it has been successfully operating in Poland and abroad, offering its collection in traditional stores already on 25 markets, including in such prestigious capitals as London, Berlin, Tel Aviv or Moscow. LPP SA manages five fashion brands: Reserved, Cropp, House, Mohito, and Sinsay. The company has a chain of over 1800 stores with the total area of over 1.3 million sq.m. The online offer of the brands collections is available on 29 markets. On the basis of a global supply chain, the Polish clothing producer distributes over 265 million pieces of clothing to three continents. 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 has chosen the general contractor and construction supervision for its distribution centre currently under construction in Brześć Kujawski

As a result of selection of the successful tenderer announced by the Gdańsk-based company at the end of last year, Bremer has become the general contractor of the investment located in the Brześć Economic Zone, while the supervision of the construction works has been entrusted to Trebbi Polska. Tacakiewicz Ferma Kresek architectural studio was responsible for preparing the design of the future distribution centre and the tender documents. The construction works, which started in January this year, will last until the end of 2021.

Partners for one of the key investments of the Gdańsk-based clothing company were selected in a competitive procedure announced in December 2020. It comprised selection of the general contractor and the entity responsible for the overall investor supervision over the construction of the new logistics facility of LPP. As a result of the tender, the construction process will be carried out by Bremer, and LPP will entrust the supervision over the implementation of the investment to Trebbi Polska.

– When choosing the contractor for the new distribution centre we took into account not only the experience in the implementation of similar facilities and the complexity of the services provided. It was also very important for us that the potential partner understands the sustainable policy of LPP as a family business. We believe that the companies chosen in the competition will help us build a facility which will be friendly for future employees and the local community, as well as for the natural environment – stresses Łukasz Piwoński, Administrative and Technical Director, LPP.

Bremer, present in Poland since 2013, specialises in the design and construction of logistics, production and office facilities in a turnkey system. Since its inception, the Polish branch of the company has completed 67 projects with a total area of over 2,100,000 m2.

– LPP is a renowned client and we perceive the choice of Bremer as the contractor for the company’s new logistics facility as a reward for our work to date and commitment to the projects entrusted to us. The distribution centre is to be equipped with modern solutions, compliant with the principles of sustainable construction, which is also in line with our approach to modern industrial construction. We believe that the protection of natural resources is of particular importance nowadays – comments Piotr Miodek, Commercial Director, Bremer sp. z o.o.

Trebbi Polska – LPP’s representative on the investment site – will be responsible for a comprehensive control of the construction process. The tasks of the Polish-British company will include coordinating cooperation between the company and the general contractor, monitoring the schedule of works and supervising the course of works, including construction, sanitary and electrical works.

– As a company providing project management and construction consultancy services, we are delighted to be involved in this project and that Trebbi Polska’s services and professionalism have been appreciated by such an important company on the Polish market as LPP. We are convinced that our long-standing experience and our qualified engineering staff will meet the investor’s highest expectations – emphasises Arkadiusz Osiński, Member of the Management Board, Trebbi Polska.

The Distribution Centre of LPP will be built according to the design by Tacakiewicz Ferma Kresek studio. The company based in Poznań is one of the biggest architectural offices in Poland, employing over 100 people. The studio specialises in designing industrial facilities.

– We have been cooperating with Tacakiewicz Ferma Kresek for several years now. The distribution centre in Brześć Kujawski will be the third logistic facility we have designed together. The studio’s architects are well aware of our needs and the conditions of the LPP’s supply chain, which has significantly improved the whole process. As regards this investment, the short period of preparation of the documentation, both for the purposes of construction and tender, was a great challenge. The project team worked practically non-stop, which I would like to express my thanks for – comments Łukasz Piwoński, LPP.

– In our opinion, the quality of the project is the outcome of cooperation between the designer and the investor. The Distribution Centre in Brześć Kujawski is a good example of great cooperation between our office and the well-informed and open partners from LPP. This project has brought us a lot of satisfaction, both as regards the level of the design challenge and the high level of communication – emphasises Grzegorz Tacakiewicz, the owner of the architectural office.

Apart from preparing the design and tender documentation, Tacakiewicz Ferma Kresek design studio will be responsible for supervising the compliance of the works with the building permit design.

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ABOUT Brześć Kujawski Distribution Centre

The construction of the Distribution Centre in the Brześć Economic Zone is the next step in the development of the LPP’s supply chain. The state-of-the-art facility will enable the diversification of logistics operations and will strengthen the currently available capacities of the supply and distribution network of the Gdańsk-based company. Its area will comprise 75 thousand m2. The centre will support the operation of LPP’s brick and mortar stores in 25 markets, with distribution of up to 8 million pieces of clothing and accessories per week. In the first phase of its operation, the facility will employ about 500 people. The launch of the Distribution Centre in Brześć Kujawski is planned for the first quarter of 2022.

LPP SA is a Polish family business and one of the fastest growing clothing companies in the region of Central and Eastern Europe. For over 25 years it has been successfully operating in Poland and abroad, offering its collection in traditional stores already on 25 markets, including in such prestigious capitals as London, Berlin, Tel Aviv or Moscow. LPP SA manages five fashion brands: Reserved, Cropp, House, Mohito, and Sinsay. The company has a chain of over 1800 stores with the total area of over 1.3 million sq.m. The online offer of the brands collections is available on 29 markets. On the basis of a global supply chain, the Polish clothing producer distributes over 265 million pieces of clothing to three continents. 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 financial results for Q3 2020/21 – a slow return to stability

• The Group’s revenue in Q3 of the 2020/21 financial year grew by almost 5% YoY to over PLN 2.4 bn. The drop in sales for 9 months of this year by 11.4% was lower than expected.

• The increase in online sales, in the period from August to October, offset the falls in traditional sales. Revenues from e-commerce in Q3 constituted 18% of the Group’s revenues. The PLN 2 bn proceeds from this channel planned for the end of the year has been maintained.

• The stabilisation of sales and the positive effects of efforts aimed at strengthening the omnichannel model led the company to unfreeze its investment plans and to return to the stock up for the next season at the 2019 level.

• The importance of exports in the revenues of the Polish clothing manufacturer is growing. In Q3, foreign sales of LPP already accounted for over 56% of the revenue.

The Q3 brought about an improvement in LPP’s financial results of LPP in comparison with the previous months. Thanks to the restoration of traditional trade and the actions taken by the company to support omnichannel sales, the Gdańsk-based company generated over PLN 2.4 bn in revenue, which means an increase of 5% YoY. At that time, the net profit was slightly higher than last year’s and amounted to almost PLN 247 m. The weaker results of traditional sales in Q3 of this year, compared to the comparable period last year, were offset by growth in the e-commerce channel.

The continued interest of customers in online shopping, despite the restoration of traditional trade, is reflected in the 86% YoY dynamics of online sales. In Q3, sales from this channel generated revenues of nearly PLN 446 m for LPP. Thus, online sales accounted for 18.2% of the Group’s revenue and 19.6% from Poland, which accounted for approximately 47% of the total revenue in this channel. Cumulatively, in the period from February to October, the company reached over PLN 5.7 bn of total sales, which is a decrease of 11.4% YoY.

– Given the continuing uncertainty and uneven recovery of traditional trade in different countries, we are satisfied with the stabilisation of the Q3 sales results. The 5% increase in revenue is a good signal and proof that we have found a way to deal with the new reality. The assumption adopted since the beginning of the pandemic that 2020 will be the year of survival and maintenance of the company’s stable situation has mobilised us to introduce changes and strengthen the omnichannel sales model, which is bearing fruit today – comments Przemysław Lutkiewicz, – Vice-President of the Management Board, LPP.

The stabilisation of the sales results of the Gdańsk-based company after nine months was also influenced by the triple-digit e-commerce dynamics of 110%. However, this would not have been possible without actions taken during the crisis and optimisation of many areas of the company’s operations, which allowed it to survive difficult months – We are still observing how the pandemic affects customer behaviour. There’s a persisting trend of larger drops in traffic in stationary stores in large cities, and smaller ones in smaller towns. With this in mind, we see the potential of the omnichannel model and the growing importance of e-commerce in it – says Przemysław Lutkiewicz. – The persistently high number of visits in online stores, as well as new and returning customers allows us to look at the previously set target of PLN 2 bn from e-commerce at the end of the year with real optimism – he adds.

Despite the continuing difficult situation in all markets, Q3 of 2020/2021 was another one for LPP with the foreign revenues exceeding the domestic ones. In the period from August to October, they accounted for just over 56% of total revenues. The 14% YoY increase in sales in Europe was influenced by the good results recorded in the Baltic States, the Balkans and Romania. In turn, the subsequent restoration of the operation of shopping centres in Russia, Ukraine and Kazakhstan and the re-entry into Belarus with the Group’s own chain of stores, resulted in a 6% YoY increase in the Group’s sales in this region.

For the 10th consecutive quarter, trade liabilities constituted a source of inventory financing. These are still at a lower level YoY despite the 33% drop in traditional sales in comparable stores between February and October. In the third quarter, their level was lower by 12% YoY and by 22% per m2. This is a result of a shift in deliveries of goods, reduced orders for the autumn/winter season and high sales results in online stores. An important role in effective stock management this year was also played by the Defrost project, which in the period of the first lockdown allowed for the release of goods from the stores for the purpose of the e-commerce channel.

– Thanks to the lessons learned in the first lockdown and preparations for the second wave of the epidemic, we survived this most unpredictable time. We expected the worst, but at the same time we have learnt a lot in the field of goods management, use of technology and optimisation of logistics. As a result, we’re planning to return to the pre-pandemic level. The key IT projects and the securing of the financial cushion have also allowed us to return to long-term plans and investments in development and logistics, which we hope will ensure security of our operations under various market scenarios – comments Przemysław Lutkiewicz. – It is equally important that, despite the survival-oriented months, we have not changed the commitments in the area of sustainable development of LPP and we intend to continue our plans in this regard – he adds.

The company plans to allocate a total of PLN 760 m for this year’s investments. This will be primarily a selective development of the sales network, especially of younger brands in the eastern markets, where the company still sees development potential for traditional stores. The company also plans to continue investments in offices and IT projects. The last months of this year also saw the slow defrosting of projects supporting logistics. In this respect, the construction of a new Distribution Centre in Brześć Kujawski will be of crucial importance for the company. The new facility, planned to be launched inQ1 2022, will strengthen the existing operational capacities of the supply and distribution network of the Gdańsk-based company. The company is also returning to its plans to enter a new market and open stores of all brands in Northern Macedonia in 2021.

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LPP SA is a Polish family business and one of the fastest growing clothing companies in the region of Central and Eastern Europe. For over 25 years it has been successfully operating in Poland and abroad, offering its collection in traditional stores already on 25 markets, including in such prestigious capitals as London, Berlin, Tel Aviv or Moscow. LPP SA manages five fashion brands: Reserved, Cropp, House, Mohito, and Sinsay. The company has a chain of over 1800 stores with the total area of over 1.3 million sq.m. The online offer of the brands collections is available on 29 markets. On the basis of a global supply chain, the Polish clothing producer distributes over 265 million pieces of clothing to three continents. LPP plays another 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 launches the construction of a distribution centre in Brześć Kujawski

In January 2021, LPP will start the construction of a distribution centre in Brześć Kujawski municipality. The investment worth about PLN 200 million is one of the key projects of the Polish clothing manufacturer in terms of strengthening and developing logistics. Construction works will last until the end of next year, and the centre is planned to be launched in the first quarter of 2022. In the initial phase of the facility’s operation, the company expects to employ 500 people. Ultimately, 1000 jobs are planned to be created.

The construction of the distribution centre in Brześć Kujawski is yet another step in the development of LPP’s logistics network, supporting the company’s business expansion, both in the area of stationary trade and e-commerce. The new facility will enable diversification of the company’s logistic operations and take some load off the main Distribution Centre of LPP in Pruszcz Gdański. Thanks to the launch of the new facility, the Polish clothing manufacturer will double the existing operating capacity of its supply and distribution network.

The investment located in the Brześć Kujawski Free Economic Zone will be carried out in stages. The site is planned to be handed over to the general contractor by January 15th 2021 at the latest. Construction of the facility, installation of warehouse automation and stocking the centre will take about 12 months. The investor plans to launch the distribution centre in the first quarter of 2022.

– The construction of the new distribution centre is of strategic importance to us, therefore we are glad to announce the launch of this investment after it had been frozen. At the same time, as a responsible company, we attach great importance to the safety and comfort of the communities in which we operate. We are aware that the construction of the centre may cause certain inconvenience to the local residents, but together with the general contractor, we will make every effort to ensure that it is as little as possible – comments Sebastian Sołtys, Logistics Director, LPP. – With the support of the Brześć Kujawski municipality, we also want to stay in touch with the residents at all times. This is particularly important for us in the face of the pandemic, when open communication is of great importance for our common security – assures Sebastian Sołtys.

The organisation of traffic in the vicinity of the investment has been planned in such a way that the transport of construction machinery is carried out exclusively on national and provincial roads. Transport routes set in the vicinity of nearby houses and public institutions will be reduced to the minimum.

As part of the measures counteracting COVID-19, in addition to the standard safety procedures, additional protective measures will be implemented on the construction site, in accordance with the current guidelines of the sanitary services.

– In recent years, together with LPP, we have managed to implement many joint projects of social and educational nature. We are convinced that with the same commitment as the company has demonstrated in its efforts to support the municipality and its inhabitants, it will take care of the safe course of works. For our part, we declare our full support and we are glad that despite the difficult situation related to the COVID-19 pandemic, this investment will be carried out for the benefit of LPP and the entire community of our municipality – comments Tomasz Chymkowski, Mayor of Brześć Kujawski.

The area of the LPP distribution centre in Brześć Kujawski will comprise 75,000 m2, including 65,000 m2 of warehouse space and 10,000 m2 of office and technological space. In the building, apart from automatic systems, solutions will be applied to enhance energy efficiency and limit the impact of the facility’s operation on the local ecosystem. On the roof of the building, photovoltaic installations with a total capacity of 1.5 MW are planned. In the first phase of operation, the centre will employ about 500 people. Ultimately, up to 1000 jobs will be created. Recruitment will start in the third quarter of 2021.

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LPP SA is a Polish family business and one of the fastest growing clothing companies in the region of Central and Eastern Europe. For over 25 years it has been successfully operating in Poland and abroad, offering its collection already on 25 markets, including in such prestigious capitals as London, Berlin, Tel Aviv or Moscow. LPP SA manages five fashion brands: Reserved, Cropp, House, Mohito, and Sinsay. The company has a chain of over 1700 stores with the total area of over 1 million sq.m. The online offer of the brands collections is available on 29 markets. On the basis of a global supply chain, the Polish clothing producer distributes over 265 million pieces of clothing to three continents. LPP plays another 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 3Q20/21 videoconference, 21st December, 12.00 pm CET

Dear Sir or Madame,

LPP, the leading CEE fashion company, has the pleasure to invite you to participate in its videoconference, on Monday, 21st December, 12.00 pm CET.

The CFO, Mr Przemysław Lutkiewicz, will comment on the company’s 3Q20/21 numbers and developments.

Videoconference in English will be available under the following link:

https://platforma.livingmedia.pl/lpp/201214003/

During the on-line broadcast participants will have the possibility to ask questions using chat.

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LPP SA is a Polish family business and one of the fastest growing clothing companies in the region of Central and Eastern Europe. For over 25 years it has been successfully operating in Poland and abroad, offering its collection already on 25 markets, including in such prestigious capitals as London, Berlin, Tel Aviv or Moscow. LPP SA manages five fashion brands: Reserved, Cropp, House, Mohito, and Sinsay. The company has a chain of over 1700 stores with the total area of over 1 million sq.m. The online offer of the brands collections is available on 29 markets. On the basis of a global supply chain, the Polish clothing producer distributes over 265 million pieces of clothing to three continents. LPP plays another 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.