LPP distinguished with the Digital Excellence Awards

It is the second time already that he jury of the Digital Excellence Awards competition awarded digital achievements of the Polish clothing manufacturer. In this year’s edition, LPP was honoured with an award in the Digital Capabilities category for implementing RFID technology in its flagship brand – Reserved.

Digital Excellence Awards is a competition aiming to honour the leaders of the digital transformation and to honour those companies that have implemented a new business model, thus making their organisations more effective and innovative.

For the first time, the jury of the Digital Excellence Awards honoured us with an award in 2018 for an innovative proprietary Store Vision application, which was recognised for its high operational efficiency. We made a commitment then that we would not stop in our digital transformation activities and we kept our word. We are very pleased that in this year’s edition of the competition jury honoured our biggest digital project so far, i.e. the implementation of RFID – explains Jacek Kujawa, Vice-President of the Management Board, LPP.

The jury appreciated above all high digital competences of the Polish clothing manufacturer, embracing new technologies and very well defined objectives of the RFID project, and at the same time excellent implementation of the technology which has brought concrete value to the organisation.

The RFID project, i.e. an electronic tag operating on the basis of a radio frequency identification system, is a solution implemented in the stores of the Polish clothing manufacturer’s flagship brand, Reserved. It is based on original software fully created by the IT team of the Pomeranian company. The tag is used for remote product identification, which enables full and precise control over a single piece of clothing at every stage of product life, starting from the dispatch from the factory, through the distribution centre, to the delivery to the stores and the availability of products in the sales floor. The main objective of the project was to increase the operating efficiency of the stores and thus increase sales.

This is a unique project in which 140 people from various areas of LPP’s business, including 40 IT specialists, were involved at a crucial moment. We are the first clothing company in Poland and one of the few in the world to use RFID technology on such a large scale. And most importantly, the implementation of this solution was the fastest implementation to date worldwide, including the construction of an IT system from scratch – explains Jacek Kujawa.

During the RFID project, LPP changed, among other things, as much as 90% of the store processes, which eventually turned into concrete and measurable effects. This led to a tightening of the supply chain, enabling faster and more frequent stocktaking of goods in stores, thanks to which the company obtains accurate information about the inventory on an ongoing basis. The project has also contributed to the increase in the quality of the sales floor stocking, shortening the time of customer service at the checkout or optimising the acceptance of deliveries in the stores. The detailed knowledge of store stock levels obtained in this way made it possible to launch a new functionality, i.e. delivery of e-commerce orders directly from the stores located closest to the customer’s place of residence, rather than from central warehouses. Thanks to the implementation of the RFID system, the customers of the brands belonging to LPP gain a number of tangible conveniences related to their shopping experience.

The RFID project was so far the most extensive and the most complex technological project that we have implemented in LPP. We are all the more pleased that the jury of the Digital Excellence competition recognized the potential of this undertaking and appreciated our digital competences, considering us as digital innovators. I believe that the coming years will bring us many more opportunities to prove that we live up to such great mark, – comments Jacek Kujawa.

______________________________________________________________________________

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.

#CiaoKendall by Reserved as award-winning campaign in the KTR (Ad Creators’ Club) competition

During the online transmission from this year’s KTR gala, awards were given for the most creative and imaginative creative ideas in Poland. The Best of Jury 2020 awards were granted in 4 categories and #CiaoKendall Reserved was among the gold winners – it was distinguished in the Best of Craft category. The campaign received a gold award in the following subcategories: Production Excellence, Casting, Color Correction, and bronze in the Online Video category.

Watch the video:

In addition, Reserved was awarded in the Photography category: gold for Re.Design campaign photographed by Bartek Wieczorek, and silver for the project: Reserved feat. Hoffland, supporting the Hoffland exhibition at the Museum of the City of Gdynia and photographed by Zuza Krajewska, as well as bronze for the charming digital Twin Room session.

The KTR competition is an important event for the creative industry in Poland. This year, a record number of projects were submitted in four areas: Communication, Design, Craft and for the first time this year: Technology.

______________________________________________________________________________

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 awarded the Eagle of Innovation of Rzeczpospolita for implementing RFID in the flagship brand – Reserved

In this year’s edition of the ‘Eagle of Innovation’ competition for start-ups and innovative enterprises, organised by the editors of Rzeczpospolita daily, LPP received the main prize in the Enterprise category. The jury of the competition appreciated the Polish clothing company from Pomerania for the project of implementing RFID technology in the Reserved brand sales network.

The aim of the Eagles of Innovation competition, organised by the editors of Rzeczpospolita daily, is to promote companies that invest in innovations and thanks to them build their competitiveness not only on the Polish but also on the European and world market. Applications could be submitted in two competition categories – enterprise and startup. This year, the jury also awarded an additional special prize for work on an innovative solution to limit the effects of the COVID-19 pandemic. The Gdańsk-based company was awarded the main prize in the Enterprise category, for implementing RFID technology in the national sales network of its flagship brand – Reserved, based on proprietary software fully created by the company’s IT team.

– We believe that the Eagle of Innovation award, granted to LPP, is a proof that we are going in the right direction, reacting to current trends and constantly developing, introducing innovations to the market. It is also a sign of appreciation for the 140 people involved in the project and the effects that, thanks to their work, our company is now achieving – says Jacek Kujawa, Vice-President of the Management Board, LPP.

The project has contributed to the increase in the operating efficiency of Reserved stores and increased sales. LPP is the first clothing company in Poland and one of the few in the world to have been using this technology on such a large scale. The implementation of this solution was the fastest implementation to date worldwide, including the construction of an IT system from scratch.

Thanks to the implementation of RFID technology, the company from Gdańsk increased the effectiveness of store replenishment by 99% and gained full control over every product in the supply chain. Moreover, the time of registering goods at the checkout counter in the store was shortened by 70 percent and the availability of goods to the customer was improved by over 13 percent. The implementation had a positive impact both on the company’s operating processes and ergonomics of work in the stores, taking some burden off the teams in their daily duties related to e.g. stocking up.

– We are glad that the jury appreciated our actions. Such an award undoubtedly shows that the market recognises and appreciates us for our increasingly ambitious solutions. It is an excellent driver to take up further challenges, which encourages us to continue building an innovative fashion tech company – adds Jacek Kujawa.

______________________________________________________________________________

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.

The new reality as an innovation driver for LPP How a Polish clothing manufacturer changed its 3-year omnichannel plans in 3 weeks.

The new commercial reality marked the beginning of far-reaching changes for LPP, setting a new direction to the company’s business strategy for the post-pandemic times. The technological, logistic and sales transformation planned by the Polish clothing company for the next three years has materialised in three weeks. By way of a genuine and full integration of sales channels, LPP, as the first Polish company of this size, operating in the trade sector, has today become a truly omnichannel organisation.

During the lockdown period, like most companies in the industry, LPP faced the challenge of maintaining a stable financial situation of the company. Caution in cash management and cost discipline brought results. However, some companies did not survive the test of time, and the crisis caused by the suspension of traditional trade for a few weeks and restrictions introduced all over the world caused disappearance of many recognised brands from the market. The unprecedented situation has shown that even multi-generational traditions and an established position have not been decisive in maintaining liquidity – rather, the success was due to flexibility and the ability to adapt quickly to the new reality, based primarily on online sales. In LPP, the decisions allowing the company to be driven safely through the most difficult period and the bold decisions in the area of logistics based on proprietary technological solutions, as well as the financial cushion prepared for the crisis, which has been expected for two years now, gave the company the opportunity to adapt to the new reality.

– LPP was, is and will remain a family business, and the resulting organisational culture was, in my opinion, a key success factor during the lockdown period. Speed and agility in action, a short decision-making process, room for experimenting and looking beyond the perspective of the next quarter allowed us to make a change in our approach to our business quickly and efficiently. Today, it is the customers who decide where they want to spend their money, and we want to offer them the product they need and the level of service they expect, regardless of their preferred channel. By fully integrating and harmonising our sales channels and the structures working for them, we have adapted to the challenges of the new reality, which in LPP is called omnichannel – comments Marek Piechocki, CEO, LPP.

What paid off during the shutdown of traditional stores and rapid growth in online sales, and what allows the company to look into the future with moderate optimism today, were investments in fashion tech.

For several years now, LPP has been consistently increasing its expenditure on the implementation and development of new technologies. Since 2016, the company has already spent over PLN 180 million on projects and IT solutions supporting key areas. In the three-year perspective, i.e. until 2023, the investments in this area are expected to amount to PLN 600 million.

Regardless of the plans adopted, an unprecedented situation – the triple-digit growth in e-commerce recorded in the first months of the pandemic, reaching five times last year’s results – forced the company to implement its proprietary projects faster than expected, allowing the company to bear such a sudden change in the balance of power between sales channels. This would not be possible, however, without the recent projects such as the implementation of RFID technology in Reserved brand, cloud solutions for online stores, optimisation of solutions related to online order picking, numerous modifications of the WMS system or a proprietary logistics platform integrating courier companies’ systems.

– Today, the IT team in LPP equals the size of the largest IT companies in the country. We have created our own solutions, which we know from the inside out and which have been tailored to meet our needs. Paradoxically, the pandemic gave LPP a powerful innovative impulse, speeding up work on projects, many of which we were able to complete in a few weeks, instead of three years, as previously planned. Without this, and above all without the enormous effort of our employees, there would have been no chance of efficient service of the dynamically growing scale of online orders, and thus of generating revenue from this channel at a level allowing us to compensate for zero revenue from stationary sales – comments Jacek Kujawa, Vice-President of the Management Board of LPP.

The starting point for the whole transformation was a change in approach and recognition that in the new reality only harmonised sales channels make sense and the decision to speed up projects that made the brick-and-mortar stores network and online stores an integrated channel with a single stock and a consistent approach to the product and the customer.

– Over the last months, LPP has been reborn in a way. From a company in which the various sales and customer communication channels have been intertwined, but not integrated, we have turned into a truly omnichannel organisation. This change has affected virtually every area of the company: product, sales, logistics, IT and above all the innovative approach of our teams. We look at sales holistically, without dividing it into traditional stores and e-commerce. The product is to be available to the customer here and now, regardless of where the sales takes place and through which tools – says Marek Piechocki.

The actual and full integration of sales in LPP is based on two basic areas. The first one was the organisational changes consisting in the combination of structures designed to support individual channels. The model introduced thanks to this, based on an integrated approach and cooperation, allowed for streamlining the flow of information, improving the management of knowledge about individual sales channels, and above all, developing a method of product presentation and customer communication consistent for all points of contact with the customer. What allowed for the full transformation were also activities in the area of logistics systems and IT systems supporting them.

– The decision to remodel the Distribution Centre in Pruszcz Gdański, previously adapted to the wholesale shipment of goods to the stores, into a warehouse for handling individual orders of e-commerce customers, marked the beginning of the transformation and our response to the enormous challenge posed by a dynamic and unprecedented increase in the number of e-commerce orders. The adaptation work, which lasted only three weeks and included the integration of two WMS platforms and the modification of goods allocation and order picking systems using artificial intelligence algorithms, allowed us to ship up to 100 thousand items of clothing a day. Thus, the efficiency of LPP logistics in this period increased by as much as 300% – comments Jacek Kujawa.

Along with the activities in the area of improving the distribution network, LPP started working on the implementation of the “Mustang” (Multichannel Stock Management) programme and its key element – the “Defrost” project –strategic for further transformation. Thanks to the introduced changes, the company is able to manage the entire stock in an integrated manner, which means that the goods are directed to where they are needed at a given moment from a location that ensures the fastest delivery to the recipient. The company’s assumption that nowadays distribution must be closer to the customer has also opened the way for testing the concept of so-called “hub stores”, which play an additional role of mini-centres in regions far from the main warehouses.

– The implementation of the Defrost project allowed us to free up goods in stores for the purposes of regular e-commerce sales and thus protect them from being shifted to sell-offs. Ultimately, we want the customer who orders a product online with the in-store collection option to know that the ordered goods are waiting for them there even before their shut down their computer. At the same time, Defrost ensures better tapping of the potential of stores for e-commerce orders implementation, reduction of the last mile logistic costs, or increasing traffic in stores – says Jacek Kujawa.

The experience of the first wave of the pandemic confirms that in the current, still uncertain market conditions, the key to survival of the business is readiness for various scenarios. The actions recently taken by LPP and the implemented organisational, logistic and technological changes are an important safeguard in case of further restrictions in traditional trade, but they are also the company’s response to the new “normality” in the clothing industry.

______________________________________________________________________________

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 has introduced the second generation chatbot by K2Bots.AI in customer service

Customers of LPP brands, such as Reserved, Cropp, House, Mohito, and Sinsay, can already benefit from AI conversational assistance. The tool implemented in cooperation with K2Bots.AI allows to solve 200 most popular problems reported to the Contact Centre by customers of online stores. The second generation chatbot solves 70% of all issues correctly, and thanks to the ability to answer open questions, it has significantly improved the service of the recently growing number of customers in the e-commerce channel of the Polish clothing manufacturer.

LPP, in cooperation with K2Bots.AI, has made it possible for its customers in Poland to use the latest generation of chatbot, which already handles almost one third of all cases reported to the Customer Service Centre. Thanks to the automation of handling the most frequently asked questions, at a time of rapid growth of online sales, the second generation chatbot has significantly increased the effectiveness of the Contact Centre of the Gdańsk-based company.

The second generation chatbot by K2Bots.AI solves already 200 most popular problems reported to the Customer Service Centre by customers of online stores of brands belonging to LPP. It can talk about 30 different delivery statuses, helps with courier returns or order problems, solving already as much as 70% of such issues by itself. It can include a consultant from the Customer Service Centre for the most difficult conversations or when the nature of the request so requires. The effectiveness of proper problem solving is evaluated in a reliable manner – by a person who analyses the course of selected conversations with customers and on this basis introduces further improvements and provides the bot with additional training.

The conversational AI by K2Bots.AI usesnatural language to respond to the problems reported by customers, and thanks to the possibility of handling open questions, a conversation with it resembles a natural exchange with a Customer Service Centre employee.

– The implementation of the second-generation chatbot is a key step in adapting LPP’s customer service tools to the surge in online sales continuously recorded since April. This innovative solution, with the possibility of transferring difficult conversations to people is the most effective and at the same time the most easily accessible channel of contact for customers. The next step would be for the chatbot to also support customer service of LPP in foreign markets – comments Dawid Telepski, e-commerce operations manager, LPP.

The chatbot in LPP has been implemented by K2Bots.AI team along with the Genesys PureCloud contact centre solution which supports calls switched over by the chatbot to a human employee and calls from LPP brands’ profiles on Facebook. Genesys PureCloud enables effective scaling of system usage and integration of all customer service channels. Chatbot uses the Google Dialogflow natural processing engine, complemented by proprietary K2Bots.AI technology.

– The solution introduced in LPP is another second generation chatbot launched by K2Bots.AI for the retail leader after the IKEA launch. With both implementations, we want to set a benchmark for natural language understanding and effectiveness that is currently achievable. The conversational AI in LPP-branded stores answers open questions in a way that is as human-like as possible and is not based on choice forms commonly used by firstgeneration chatbots – says Łukasz Lewandowski, K2Bots.AI CEO.

Presentation of the LPP chatbot https://youtu.be/mfcd8ws2LME

______________________________________________________________________________

About LPP

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.

About K2Bots.AI

K2Bots.AI implements second generation chatbots, which understand most of the customers’ questions, thus actually reducing the load on the Contact Centre. The K2Bots.AI chatbots are based on technologies provided by two world leaders – Genesys Cloud as a solution for live chat and multi-channel customer service and Google Dialogflow as an automatic conversation engine.

LPP confirms the start of construction of a distribution centre in Brześć Kujawski

LPP goes back to the plans concerning the construction of a distribution centrein Brześć Kujawski. The decision to postpone the project announced in June this year was caused by the pandemic, which forced the Polish clothing manufacturer to significantly revise its investment plans. After the analysis of the current situation of the company, by the decision of the Management Board of the Gdańsk company, the strategic investment in Brześć Kujawski is to start in the first quarter of 2021.

The crisis caused by the COVID-19 epidemic had a significant impact on the financial standing of LPP. The loss of a significant part of revenues due to restrictions on the operation of retail outlets forced the company to introduce strict cost discipline in each area of activity and changes in investment plans, including the revision of the project to build a distribution centre in Brześć Kujawski.

– Without a doubt, it was one of the most difficult periods in the history of LPP. We are all the more pleased that today, after many months of struggle to survive and maintain the company’s financial liquidity, we can have an optimistic outlook on the future.. The decisions we made during this time and the implementation of projects strengthening e-commerce sales and optimisation of areas supporting the company’s operations during the crisis have made it possible to maintain continuity of business processes. Owing to these actions, despite the still uncertain market conditions, the company’s situation today is stable and allows us to continue our commitments in Brześć Kujawski – comments Jacek Kujawa, Vice-President of LPP.

The construction of the new distribution centre remains one of the key undertakings for further development of LPP, and its location in the Brześć Kujawski municipality is of strategic importance for the company in operational terms. The project, which will be carried out in stages, will be adapted to the current direction of the company’s development and its current and future logistics needs. The modern and partially automated facility with an area of 65,000 m2 will provide jobs for about 500 people already in the first phase of its operation. Ultimately, as the intensity of warehouse operations increases, the company plans to create up to 1000 jobs. The construction is planned to start in the first quarter of 2021 and the distribution centre will be launched at the turn of 2021/2022.

LPP also remains an active participant in the social life of the municipality. So far, activities undertaken in cooperation with the Municipal Office will focus primarily on support in the area of education of the youngest residents. This year, the sets of gifts funded by LPP as part of the “School starter kit” campaign will once again be given to pupils starting their education in primary schools in the municipality. With first-graders as well as senior pupils in mind, LPP also confirms the continuation of the “English with LPP” educational programme initiated in 2019 in cooperation with a language school in Włocławek and the municipality authorities.

– I am very pleased with the decisions taken by LPP to start the construction of the distribution centre in the municipality of Brześć Kujawski. Taking into account the economic situation caused by the COVID-19 epidemic, we had been waiting patiently for the decisions of the Management Board with full understanding. I would also like to thank on behalf of the residents for the continuation of the social activities financed by LPP, related to the school starter kit and English lessons. I wish the Management Board and the whole community of LPP successful implementation of the intended project in accordance with the adopted schedule and I declare the Brześć local government’s help and involvement in the implementation of this project – comments Tomasz Chymkowski, Mayor of Brześć Kujawski.

______________________________________________________________________________

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.

The decision of major shareholders of LPP to swap shares is another step on the way to strengthening the family business for generations

The two largest shareholders of LPP, the Semper Simul Foundation and the Sky Foundation, have decided, according to today’s public announcement, to swap their ordinary shares into preferred shares between these entities. In the opinion of the company’s Management Board, this opens yet another stage towards securing the succession of the Polish clothing manufacturer. The actions taken are a guarantee of permanent and stable management of the company and another step on the way to LPP’s growth as a Polish family business for generations.

The decision announced in 2018 by the president and founder of LPP, Marek Piechocki, to concentrate private assets, including the company’s shares, in a family foundation gave rise to the implementation of activities planned for the next few years to ensure the continuity of business operating for nearly 30 years. The decision to swap ordinary shares into preferred shares between the company’s main shareholders is, in the opinion of the Management Board of LPP, in the company’s best interest. It is a confirmation that its stability, in such difficult times for the whole industry, is of paramount importance to its founders.

Under the conditional contract concluded between the shareholders ,the Semper Simul Foundation will dispose of a package of ordinary shares in favour of the Sky Foundation and will purchase a package of registered preference shares from it, thus becoming the majority shareholder of LPP. The intention of the decisions taken by the shareholders is the long-term development of the company and securing its Polish capital.

– The family business character of LPP is a guarantee of predictability and stability of the company’s operations in the long term perspective. Today, in such uncertain and difficult times for us all, it is a value that cannot be overestimated. I am convinced that both our employees, as well as partners and contractors have received today another proof that LPP was, is and will always remain a Polish family business – comments Marek Piechocki, President of the Management Board of LPP, and adds: – Personally, as I have always been responsible for the day-to-day operations of the company, I perceive the decision of the two biggest shareholders of LPP to leave the reins in the hands of one of the founders as an expression of trust and confirmation of the durability of this decision.

In the opinion of the Management Board, the action of the leading shareholders of LPP is not related to the current operations of the company. However, it is a confirmation of durability and stability of the long-term business goals adopted by the company and strengthening of conditions for its development in the years to come. Leaving the responsibility for management and strategic decisions in the hands of one of its two founders is also a guarantee that LPP will remain a Polish company building its capital based on values that have remained unchanged for years, which is reflected in the position of the company on the economic map of Poland.

______________________________________________________________________________

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.

A slow pick-up in LPP’s sales results – the Polish clothing manufacturer sums up Q2 2020/21

• LPP’s revenues in Q2 of the 2020/21 fiscal year were lower than in the comparable period last year by 9% and amounted to PLN 2.1 bn. Group revenues for the entire H1 amounted to PLN 3.3 bn, which indicates a fall YoY by 20.6%.

• The continued triple-digit increases in e-commerce sales have not balanced the overall falls in revenues. The 30% share of the online channel in the Group revenues did, however, render it possible to maintain a stable financial situation of the company. The PLN 2 bn proceeds from online sales planned for the end of the year has been maintained.

• The Q2 was marked by negative LFLs due to uneven lifting of trade restrictions in particular countries and the changes in consumer purchasing habits.

• Yet another quarter in a row, the foreign sales results of the Polish producer were higher than the domestic revenues.

The Q2 of the shifted fiscal year brought about an improvement in financial results of LPP in comparison with the previous months. In the period from May to July, the company generated PLN 2.1 bn revenues and operating profit of PLN 32.3 m. The pick-up in revenues in that period was due to lifting the economic lockdown restrictions and record e-commerce turnover, which translated into PLN 3.3 bn of total revenues in H1. Despite the continuing double-digit drops in LFLs, the results of comparable sales in the subsequent months of the previous quarter also improved. Three-digit dynamics in the online channel, which reached 125% YoY, provided LPP with revenues exceeding PLN 621 m. Thus, online sales in Q2 accounted for 29.2% of the Group’s turnover and 30.9% from Poland, which accounted for approximately 48% of the total online revenues.

The growing popularity of shopping in e-stores, and thus more effective use of promotions by customers, resulted in a slight decrease in the gross margin YoY, which remained, however, at the expected level of 47.6%. The better financial result also allowed the company to replenish its cash resources, therefore the company plans to increase investment outlays still this year, focusing on the expansion of retail floorspace, logistics and office facilities and IT projects.

– The recently visible upward trend in revenues is a positive signal for us. Although this does not yet mean a return to the levels recorded before the pandemic. The single-digit drop in quarterly sales YoY and the slowing down of LFL decreases, with the continuation of the three-digit dynamics in the online channel, allow us to have a positive outlook for the future. After many months of great uncertainty, the currently stable situation of the company has also given us the opportunity to unfreeze our investment plans. Due to the ongoing pandemic, the market situation is, of course, still unstable and we need to be prepared for different scenarios. However, the actions taken during the crisis and the optimisation of many areas of the company’s operations, combined with the financial cushion, give us a sense of security – comments Przemysław Lutkiewicz, Vice-President of the Management Board, LPP.

The increase in savings in the Polish clothing company was also possible thanks to a significant reduction in the costs of own stores – by as much as 26% YoY. The process of renegotiation of retail floorspace rental contracts played a major role here. As a result of the talks with shopping mall owners, the company managed to increase the share of turnover-based rents and reduce the lease costs per m2, which gives grounds for increasing profitability of the locations covered by negotiations in the following years.

The rebound of sales after the re-opening of shopping malls, combined with the reduction of seasonal orders and a sound promotional policy in all brands also had a positive effect on the company’s financial standing, allowing to avoid premature sell-offs of collections. This, in turn, reduced the level of inventories by 16% compared to last year. The company is also continuing its policy of financing inventory from trade liabilities, aiming to level these values and release additional cash, as it did in the previous quarter.

Despite the continuing difficult situation in all markets, Q2 of 2020/21 turned out to be another one for LPP withe foreign revenues exceeding the domestic ones. In the period from May to July, they accounted for nearly 55% of total revenues. The visible difference in revenues from individual regions where the company sells its collections is to a large extent a result of different approach of particular countries to closing and re-opening shopping malls. – In the Baltic States, including Lithuania, only moderate restrictions were introduced. We have seen a much more restrictive approach in the Middle East and CIS countries, where the ‘freezing’ of trade in stationary stores lasted the longest – comments Przemysław Lutkiewicz.

Although the COVID-19 pandemic continues to affect the company’s activities, it consistently implements successive assumptions of the Sustainable Development Strategy. The second quarter was marked by preparations for LPP to join the Zero Discharge of Hazardous Chemicals initiative. The aim of the agreement between companies and research and academic centres is to eliminate hazardous substances in the clothing and textile industry by setting and implementing new standards. By obtaining the status of “Friend of ZDHC”, the Gdańsk-based company has also committed itself to take action in respect of suppliers, encouraging them to eliminate harmful substances completely in the factories. In addition, the company supports its partners in optimizing the management of chemical agents in order to reduce their consumption, which is to increase the safety of employees who are directly responsible for the production process.

______________________________________________________________________________

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 2Q20/21 videoconference, 9th October, 13.00 pm CEST

Dear Sir or Madame,

LPP, the leading CEE fashion company, has the pleasure to invite you to participate in its videoconference, on Friday, 9th October, 13.00 pm CEST.

The CFO, Mr Przemysław Lutkiewicz, will comment on the company’s 2Q20/21 numbers and developments.

Videoconference in English will be available under the following link:

https://platforma.livingmedia.pl/lpp/201001003/

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

1H20/21 report and presentation will be published on 8th October.

______________________________________________________________________________

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 introduces PayPo deferred payment option in online stores in Poland

LPP, a Polish clothing manufacturer and one of the leaders of the e-commerce market in Poland and Europe, has decided to implement a new service in online stores of all its brands enabling customers to make deferred payments for purchased goods. In this respect, the Gdańsk-based company has decided to cooperate with PayPo – the leader of deferred payments in Poland.

The pandemic period has significantly changed the image of the retail industry, including the habits of customers who are more and more into shopping via the e-commerce channel. This form has also proved to be attractive to those who had not had the habit of using the online channel to buy fashion. With the change of the market itself, LPP has dramatically accelerated its efforts to develop e-commerce. One of them was the decision of the company to introduce a new service – “Buy now, pay later with PayPo” in online shops of all its brands in Poland.

Thanks to this solution, Polish customers of LPP have the opportunity to make online purchases with an option to pay for them even up to 30 days after the transaction itself. Therefore, buyers have the chance to check their order even before making payment. In case of returning the purchased goods before the payment deadline, the transaction is automatically cancelled without the customer having to pay for it. – With the interest of our customers in mind, in LPP we have been developing online sales of our brands for many years, investing in new technologies and solutions to facilitate the management of this channel and improve the comfort of shopping. As our experience from other markets shows, deferred payments are more and more popular with people using the offer of e-stores, therefore the introduction of this form of settlement on the Polish market was only a matter of time, explains Dawid Telepski, e-commerce operations manager, LPP.

The key issue for the Polish clothing manufacturer was to find a partner who would not only provide the company with technical facilities, but would also be open to adopt an approach tailored to the needs of LPP. – The choice of PayPo, the most recognizable brand in terms of deferred payments in Poland, as the supplier of this solution was not a random one. Thanks to PayPo’s flexible approach to our expectations, the whole process of implementation and integration with the system of online stores of the brands belonging to LPP ran very smoothly, which in the current, dynamically changing reality was particularly important for us, adds Dawid Telepski.

PayPo is the leader on the market of deferred online payments in Poland. So far, it has established cooperation with more than one thousand online stores in the country, including over 100 operating in the area of fashion.

The pandemic has contributed to speeding up the process of digitisation of the Polish economy. For the retail trade it meant a faster pace of transferring sales to the internet and the implementation of processes facilitating shopping done without leaving home. The situation necessitated this form and this was also what the Poles required as their shopping habits increasingly turned to the online channel. PayPo deferred payments is a solution that facilitates online shopping, while guaranteeing full security of transactions. I am glad that such a large European player as LPP decided to tap into its advantages – commented Radosław Nawrocki, CEO of PayPo.

The success of deferred payments lies in convenience and efficiency of such an option. Thanks to the new service, every customer can buy and check the product without involving any funds and return it without any cost. According to PayPo, the “buy now, pay later” method increases the volume of sales, has a significant impact on the increase in the value of purchases and significantly reduces the number of so-called abandoned carts.

Offering customers deferred payment options is another element of the improvements that LPP decided to implement to make its online stores more customer-friendly. A continuous improvement and extension of functionalities of the brands belonging to LPP available in online sales is a response to the dynamically changing commercial reality. In addition to the introduction of deferred payments, the company has recently remodelled its distribution network to speed up deliveries. It also plans to implement further changes in the nearest future, including, among others, the available forms of collection and return of ordered products.

______________________________________________________________________________

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 31 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.