LPP has launched an e-commerce warehouse in Slovakia to serve Central European markets

LPP, the largest Polish clothing manufacturer, has launched a Fulfilment Enter-type warehouse in Slovakia as part of its e-commerce channel development strategy, to support online sales on Central European markets. The warehouse located in PNK Park SEREĎ was originally to cover 25,000 m2 of industrial space with an option to expand it by another 7,000 m2 over the next three years. The company, given the intense growth of sales in the Central European region, as well as the dynamic increase in the importance of the e-commerce channel in the LPP’s revenue structure, decided to speed up these plans.

– At the end of last year we made an estimation of the usefulness of additional warehouse space and decided to get the facility in operation in the enlarged option of 32,000 m2. This solution allows us to use the facility in a cross-dock model, which combines the operations typical of online sales service with the supplying the chain of brick-and-mortar stores in Central Europe – explains Sylwester Dmytriwski, e-commerce fulfilment general manager LPP.

The decision to open a warehouse in Slovakia is part of the company’s strategy for the development of its international distribution network. The location and the facility itself meet a number of criteria which the Polish clothing manufacturer was particularly interested in. The most important of them are: proximity of key markets for LPP, availability of workforce and technical specification of the building, which allows for the implementation of state-of-the-art intralogistic technologies and warehouse automation.

The building has been divided into two parts, the first one with an area of 17,000 m2 is mostly dedicated to manual operations. The second part (15,000 m2) is dedicated to automatic solutions and cross-dock operations of goods intended for the stores chain. It has also been equipped with high storage racks for e-commerce and brick-and-mortar stores from the Central Europe region. The total storage area for this purpose includes as many as 2040 pallet spaces. Despite the relatively short time that has passed since the launch of the facility, the maximum number of products that entered and left the warehouse in one day has reached 152,000.

– Our new warehouse facility will play a key role in LPP’s distribution network. It ensures the highest standard of customer service for our online stores not only in Slovakia, but also in the Czech Republic and Hungary, although we do not rule out the possibility that the range of operation of the warehouse will be extended to other countries – comments Jacek Kujawa, Vice President of the Management Board of LPP.

The investment makes it possible to offer all customers of LPP brands from the Central European region the next business day delivery, and in some locations even the same day delivery.

Apart from the standard automatic solutions used by LPP in logistics facilities, the warehouse in Slovakia will ultimately be equipped with three unique installations, which will be built in partnership with Vanderlande – the largest supplier of warehouse automation worldwide.

– Close cooperation with Vanderlande, but also growing needs for improvement of logistic processes, inspired us to implement the state-of-the-art automatic solutions in our facility in Slovakia, which will make it the most modern warehouse of this type in this part of Europe – adds Dmytriwski.

The facility will ultimately include a pocket sorter with a system of conveyors with RFiD control tunnels and the so-called shipping sorter, which will automate the process of sending orders.

– The solutions used in the warehouse are the highest level of warehouse automation currently available on the market, which puts LPP in the lead of companies that have decided to implement them. With our scale of operations and prospects for the Central European market, the implementation of advanced warehouse automation was a necessity, which will provide our customers in the Czech Republic, Slovakia and Hungary with immediate delivery of ordered goods and will significantly increase the competitiveness of our offer in these markets – concludes Kujawa.

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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 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.

Artificial Intelligence algorithms in e-commerce warehouse of LPP

In the LPP warehouse handling online sales orders (Fulfilment Centre), a solution optimising order picking path using Artificial Intelligence algorithms has been implemented. This innovative system, which is an element of the Warehouse Intelligence project, is the result of cooperation between LPP and PSI Polska –an industrial software producer. The use of the machine learning mechanism in the warehouse of the Polish clothing company allows to shorten the path needed for order picking, increase the efficiency of the facility, optimise the use of warehouse resources and significantly speed up the handling of e-commerce shipments.

LPP, together with PSI Polska, a producer of software for industry, implemented an innovative solution to optimise the order picking path using Artificial Intelligence in the Fulfilment Centre-type warehouse belonging to the Polish clothing company. This is a response to the growing volume of online orders and a clear change in the market share of this sales channel.

LPP, the owner of Reserved, Cropp, House, Mohito and Sinsay brands, handling about 11 million orders a year, is one of the leaders of the e-commerce market in Poland and Europe. The dynamic growth of online sales, also in connection with the Covid-19 epidemic, poses an increasing challenge to meet the growing demand of customers for online shopping. Last year, the share of online sales in LPP operations was 12%. However, the pandemic has significantly changed the balance of power between the traditional and online channels. – At the moment, we are observing as much as a 4-fold increase in customer interest in online shopping. This determines the need to optimise logistics and IT solutions aimed at meeting new customer expectations without compromising the quality and, above all, the speed of handling online orders – says Jacek Kujawa, Vice-President of the Management Board of LPP. Therefore, together with our long-standing business partner, PSI Polska, we decided to implement a solution based on Artificial Intelligence algorithms, which will allow us to significantly increase the efficiency of online order processing, he adds.

Thanks to the warehouse management system (WMS), LPP guarantees its customers that the ordered products will reach them quickly and without any problems. – The main task of the implemented algorithm is to effectively solve the so called “travelling salesman problem”, TSP – comments Jerzy Danisz, PSIwms System Standard Development Manager in PSI. It consists in determining the shortest route connecting several points on the map. In the case of a warehouse, the system must determine the optimum route for several dozen picking locations. What seems simple at first glance in fact has been posing a significant problem for mathematicians for years – concludes Jerzy Danisz.

Therefore, LPP and PSI Polska have decided to prepare a solution based on Artificial Intelligence algorithms. The use of a machine learning mechanism, namely a neural network based on CNN units (Convolutional Neural Network) , allows to generate lists of products needed to complete an order in real time, determine the shortest path and propose optimum use of resources, including equipment, trolleys and time of warehouse employees. This is done, among other things, through the use of the so-called genetic algorithm, which, through the application of evolutionary operators (such as crossing and mutations), allows to create an optimum picking list.

– Thanks to the implemented solution, as the first tests demonstrate, the length of picking paths was reduced by 30%. This also translates into a significant increase in the efficiency of the warehouse picking process itself by as much as 12.3%, explains Sylwester Dmytriwski, E-commerce Fulfilment General Manager in LPP. The algorithm not only allows for a reduction in the distance required for order picking. Thanks to the Artificial Intelligence module, the mechanism “learns” on the basis of the information it has. It absorbs data concerning the warehouse, orders and available personnel. On this basis, it groups products, facilitating the whole process, adds Sylwester Dmytriwski. Thanks to continuous cooperation with other modules of the resource management system, the implemented solution is able to update the information it has in real time and adjust the generated lists.

The picking path optimiser is an element of the Warehouse Intelligence project, whose concept, based on the use of Artificial Intelligence, has been appreciated by a team of experts from the National Centre for Research and Development in Warsaw and recommended for funding of the project. Good cooperation and the use of agile implementation methodologies allowed PSI and LPP to smoothly introduce an innovative solution that brings satisfactory results already in the first phase of the project. We have been cooperating with LPP for years. During this time, the PSIwms system allowed for handling more than 10-fold increase in volume in distribution centre of LPP in Pruszcz Gdański. We are glad that LPP has also chosen us to handle its e-commerce processes. The ability of LPP team to quickly implement innovations and react to changes is appreciated and inspiring for us, concludes Arkadiusz Niemira, CEO of PSI Polska.

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PSI Polska Sp. z o.o. located in Poznań is a part of an international corporation – PSI Software AG – which, based on its own software, provides comprehensive solutions for effective management of the energy and goods supply chain. PSI was founded in 1969 and has a headcount of 2000 employees worldwide. The 300-strong team of PSI Polska develops software for the needs of the whole corporation and carries out system implementations in Poland and abroad. In Poland, PSI software solutions have been used by, among others, ABM Greiffenberger, ArcelorMittal, CCC, DMG Mori, Empik, Inter Europol, LPP, MPK Poznań, Nałęczów Zdrój / Cisowianka, Piątnica, Stelweld, Volkswagen.

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.

In LPP, the beginning of the year saw double-digit falls in LFLs and triple-digit increase in e-commerce revenues.

• The total revenues of the Polish clothing producer in 1Q20/21 exceeded PLN 1.1 bn, which means a fall by 35.3% in relation to a comparable quarter of the previous year.

• Due to the lockdown during the most part of the quarter and stationary stores being closed, the company recorded double-digit negative LFLs in all countries where it operates.

• Owing to the continuing triple-digit e-commerce growth, according to the plan for 2020/21, LPP intends to reach PLN 2 bn revenues in this channel.

• The results for 1Q20/21 were strongly affected by COVID-19 pandemic. The resulting shut-down of shopping malls in that period led to the loss of nearly 100% of revenues from sale at brick-and-mortar stores.

The first quarter of LPP’s shifted fiscal year, encompassing the period from 1 February until 30 April was marked by the pandemic. Owing to the closure of shopping malls in the majority of countries where the company has its brick-and-mortar stores affected the sales results – with the level slightly over PLN 1.1 bn giving the result lower by 35% YoY. That also negatively affected the company’s gross profit margin, which amounted to 48%, which means a fall by almost 7 p.p. YoY. With the lower Group revenues and double-digit negative LFLs, the company recorded a considerable increase in the proceeds from the e-commerce channel, which in1Q20/21 amounted to PLN 384 m and were higher by as much as 120% YoY. Online sales in this period constituted as much as 38% of Group revenues from Poland and nearly 33% of the Group’s total revenues.

– On the one hand, we have been experiencing the hardest period in the company’s history which affected the sales results of all our brands. On the other hand, we are optimistic as far as our efforts in the scope of supporting online sales are concerned – given that this was the only source of revenues for us during that time. Activities supporting the development of this channel, such as the implementation of the Fulfillment Center project in the Distribution Centre in Pruszcz Gdański, which was extended in February, or increasing the pace of migration of our brands to the cloud with strategic cooperation with Google, resulted in a three-digit increase in revenue YoY in March and April. Importantly, this trend continues after the opening of stores in May, although at a slightly lower level. Given that currently our sales in brick and mortar stores still account for only 50% of the revenue generated in the comparable quarter of the previous year, the good results of the online channel confirm our belief that the plan to double the e-commerce revenue this year to PLN 2 bn is very realistic today – comments Przemysław Lutkiewicz, Vice-President of LPP.

The Polish clothing company estimates that not only online shopping as such is gaining in popularity. In the first quarter of this year, there was also a clear increase in visits in the online stores of brands belonging to LPP via mobile devices. In this period, they accounted for as much as 80% of the entire traffic in online stores. At the same time, they generated as much as 60% of revenues in this sales channel. The positive reaction of customers to the solutions offered by the Gdańsk-based company and the facilitation of remote shopping encourage the company to further strengthen and develop the omnichannel model.

– Despite the continued double-digit growth of revenues from the online channel, they are not able to cover the losses resulting from the long lockdown of our business. The effort put into the development of e-commerce has a chance to bring the expected results only while maintaining plans for floorspace increases and improving existing stores. Therefore, we are convinced that operating in the omnichannel model, taking into account the change of customers’ expectations, as well as the offer of our brands adapted to new shopping trends and a sound promotional policy, will allow us to tap into the potential resulting from the combination of these two sales channels – adds Przemysław Lutkiewicz.

Export has still been playing an important role in the structure of LPP revenues. For yet another quarter in a raw, despite the difficult situation on all markets, foreign sales of the Polish producer exceeded the domestic sales and accounted for 54% in the revenue structure. At the end of the first quarter of 2020/21, the Gdańsk-based company conducted sales on 24 foreign markets. According to the announcements, this situation will change only in the following year, when the company will debut on a new market, i.e. Northern Macedonia.

Changes in the development plans of the LPP’s sales network are not the only decisions related to the implementation of the savings plan. The scenario of recovering from the crisis by the Polish clothing producer still assumes a reduction of investment outlays by approx. 60% this year, sound inventory management and maintaining the cash base by, among others, renouncing the payment of dividends. These and other decisions, concerning, among others, the reduction of orders for the coming season, as well as the control of store costs and the reduction of the number of new store openings, already in the first quarter had a positive impact on the balancing of trade liabilities with inventories.

– Despite operating in a highly uncertain market environment, our sustainable cost policy and cash reserves ensured our financial security. At the same time, we managed to achieve our long-term goal, which was to balance trade liabilities with inventories, which means releasing cash and improving our liquidity, so important especially in the current situation – confirms Przemysław Lutkiewicz.

After a period of freezing of the global economy, markets and global supply chains are gradually returning to operation in the new reality. Shopping in LPP stores in shopping malls is already possible in most markets, apart from Kuwait.

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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 24 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.

LPP’s 1Q20/21 videoconference, 25th June, 12.30 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, 25th June, 12.30 pm CEST.

The CFO, Mr Przemysław Lutkiewicz, will comment on the company’s 1Q20/21 numbers and developments.

Videoconference in English will be available under the following link:

https://platforma.livingmedia.pl/lpp/200621003/

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 30 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.

Record-high revenues and PLN 1 bn in taxes – Gdańsk-based company LPP summarizes 2019

• The Polish clothing manufacturer ended last year with another record revenues of almost PLN 10 bn.

• A historic moment for the Gdańsk-based company – foreign revenues accounted for 52% of the entire Group’s revenues last year.

• Translating the good results into almost PLN 1.1 bn of contribution to the state budget in taxes.

Last year was definitely a successful one for LPP. The company’s revenues in the last 4-month quarter of 2019 amounted to PLN 3.5 bn, with a stable gross margin of 53.4%. On an annual basis, the company recorded an increase of over 13% compared to 2018, generating PLN 9.9 bn in revenues and a net profit of PLN 500 m. The record revenues were the result of maintained cost effectiveness of the implemented projects and the extension of the availability of brands belonging to the LPP portfolio to 39 markets. These results also translated into a significant economic contribution to the Polish economy. Last year, the company from Gdańsk paid PLN 1.1 bn in taxes and other levies to the state budget. Exceptionally, in the audited period, the company’s financial results were closed in a 13-month operating period. The change in reporting from the calendar year to the financial year which ends on the last day of January better reflects the seasonality of the business.

– Another successful year is behind us, in which, for the first time in the history of the company, already in the second quarter our foreign revenues exceeded those achieved in Poland. This confirms above all the good reception of our collections, mainly in Europe. Importantly, our younger brands, apart from Reserved, also recorded excellent results – practically every month House, Mohito and Sinsay recorded positive LFLs. We are particularly pleased with the highest ones, i.e. in Israel, Romania, Germany and the UK, where the markets are very competitive – comments Przemysław Lutkiewicz, Vice-President of LPP.

Last year was also a period of further growth in online sales for the Gdańsk family company. In the last quarter, it accounted for 15.8% of Polish revenues and 14.2% of the Group’s total revenues. In the same period, revenues from this channel in Poland already accounted for 54% of LPP’s total e-commerce revenues. – Thanks to the further development of online stores abroad, marketing expenses and the change in the shopping habits of Polish customers, resulting from Sundays without trade, e-commerce sales for the whole last year brought over PLN 1.1 bn in revenues. Such good results confirm the validity of our decisions to invest in the expansion of the distribution network and technological support in logistics as a basis for further development of the multi-channel sales. Moreover, thanks to this, our contribution to the state budget exceeded PLN 1 bn. Good financial standing of the company also allowed us to prepare the ground for the implementation of many projects supporting our pro-environmental activities – adds Przemysław Lutkiewicz.

Due to the outbreak of the pandemic, many of the company’s business plans have changed. It has been a primary goal of the LPP’s Management Board to lead the company through this difficult period, and all actions taken are aimed at maintaining the company’s stable situation, thus ensuring the safety of employees and long-term contractors in Poland and worldwide.

– A new reality in commerce is emerging before us. We have achieved a lot in recent years, but now we have no certainty about the future. Observing the events of the first quarter of this year, we decided to implement a scenario assuming a reduction of costs and investment outlays. We also focus only on areas that support the company’s growth in these particular market conditions, such as the surge in growth in the e-commerce channel. The new reality is also a space for the development of the omnichannel, which remains a priority for us and this area will certainly speed up – adds Przemysław Lutkiewicz. – We believe that flexible response to changes in commercial conditions, diversification of sales channels and a good price offer of our brands will render it possible for us to survive this tough time. We hope that we will manage to maintain a safe balance sheet and return to growth after the crisis – concludes Przemysław Lutkiewicz.

Full version of the LPP’s integrated report for 2019/20 financial year is available at

https://www.lppsa.com/en/sustainable-development/annual-report.

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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 30 markets. LPP plays another important role as it employs over 25 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 Google as its strategic digital partner

LPP, a leading Polish clothing manufacturer, has chosen Google as its strategic digital partner. Thanks to the established cooperation, the company will be able to tap into the cloud’s potential to grow its online activity and support the digital transformation in the area of marketing.

The established cooperation focuses primarily on the introduction of advanced solutions, such as an analytical platform or data repository, but also the implementation of innovations in the technical infrastructure of e-commerce and the implementation of AI-based product recommendations. According to the plans adopted by LPP, the company intends to move to full service of e-commerce technical infrastructure with Google Cloud by the end of 2020.

The share of online channels in shopping, also in the clothing segment, has been growing steadily over the last few years. However, the changes that have taken place in the last few weeks in the shopping habits of Poles have led to an increased popularity of e-commerce channel which is used even more often. According to the data of the Polish Payment Standard, only in March online sales in the clothing category increased by 63%, as compared to February. This trend is likely to continue, making the development and investment in e-commerce necessary to meet current expectations of customers and ensure safe and comfortable shopping experience for them. – We are the leader of the retail industry in Central and Eastern Europe and plan to further increase the share of online sales in our revenue structure. Recently, our e-commerce revenue has increased by 129%, and in April alone it was as much as 270%. In order to maintain the effective development and growth of the Group’s digital channels, we have entered into a strategic agreement with Google Cloud, explains Arkadiusz Ruciński, E-commerce Director LPP. We have ambitious plans for the next few years, so we have decided to engage with an experienced partner who will provide us with both know-how, but also the infrastructure and tools to build and maintain e-commerce sites, he adds.

As part of the established cooperation, in addition to the implementation of Google Cloud technology, the Group will tap into Google’s knowledge and expertise in the fields of artificial intelligence, performance marketing, big data, and machine learning. Moreover, Google expert team supports LPP in its expansion into foreign markets.

– We started cooperation with LPP a few years ago, and in 2019 the company decided to move all activities related to Mohito brand to the cloud. Owing to Google Cloud tools, for the last year and a half the website has been gaining high efficiency and reliability, especially in periods of increased traffic. All promotional actions or current order processing are carried out smoothly and without any disruptions, as the system automatically scales to the number of visitors, also ensuring maximum efficiency. The result of these activities is cost optimization and providing the highest quality of customer service in digital channels, explains Dawid Papież, Industry Head in Google Poland.

– From our perspective, using the potential of the cloud is primarily about speed, security and flexibility. The very migration of the production environment of the Mohito’s online store to the cloud took only 6 weeks. At the same time, we obtained an online copy of the website, which, in case of a possible failure, will allow us to resume the store’s operation very quickly, minimizing the risk of losing business continuity, explains Marek Maciejewski, E-commerce Infrastructure and Security Manager in LPP. The cloud ensures great flexibility, as the size of the operating environment will be dynamically adjusted to the traffic handled. Cloud solution also means savings. On the one hand, the costs of infrastructure maintenance will be adequate to the actual traffic handled. On the other hand, dynamic scaling will significantly shorten the process of preparations for sales or periods of increased traffic, eliminating the need to dimension the machine park for traffic forecasts, buying servers or testing their configuration, adds Marek Maciejewski.

– The retail industry is extremely important for Google Cloud, so we are really pleased to continue our cooperation with the market leader in the region. We are glad that thanks to Google Cloud tools, brands such as Reserved, Cropp or Sinsay can develop even faster, responding to trends and consumer needs, adds Magdalena Zwierzyńska, Google Cloud team.

Over the last few years, the LPP Group has been preparing for the digital transformation through significant investments in the development of the online team and competence development in the analytical (using the Google Analytics tool), cloud (testing AI Recommendation) or performance dimension, responsible for online sales.

LPP decided to use Google Cloud solutions in the following areas, among others:

• Analytics – implementation of an analytical platform and data repository (the so-called data lakes, where a huge amount of unprocessed data is stored in the original format). Thanks to this, LPP will be able to gather all resources in one place and receive comprehensive reports in a short time, based on analysis from many distributed systems. This allows for data democratization – different teams can easily work with the collected information for sales, marketing and logistics purposes.

• E-commerce infrastructure – full optimization that ensures smooth and reliable operation of systems, even in the most peak periods such as the Christmas holiday season. This ensures cost optimization, also in the IT area, and increases system reliability.

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About Google Cloud:

Google Cloud provides organizations with leading infrastructure, platform capabilities and industry solutions, along with expertise, to reinvent their business with data-powered innovation on modern computing infrastructure. We deliver enterprise-grade cloud solutions that leverage Google’s cutting-edge technology to help companies operate more efficiently, modernize for growth and innovate for the future. Customers in more than 150 countries turn to Google Cloud as their trusted partner to solve their most critical business problems.

O 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 30 markets. LPP plays another important role as it employs over 25 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 4Q19/20 videoconference, 21st May, 12.30 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, 21st May, 12.30 pm CEST.

The CFO, Mr Przemysław Lutkiewicz, will comment on the company’s 4Q19/20 numbers and developments.

Videoconference in English will be available under the following link:

https://platforma.livingmedia.pl/live/200514003/

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

______________________________________________________________________________

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 30 markets. LPP plays another important role as it employs over 25 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 completed the construction of its new office building in Kraków

The headquarters of LPP’s Kraków branch, where the design offices of House and Mohito brands are located, is now ready to welcome the employees. The new space has been adapted to the needs of the fashion company’s creative team. Sustainable solutions applied in the building will have a positive impact on the comfort of work of the 400-person crew and energy efficiency of the entire 9 thousand square metres building. The new seat was handed over on 20 April.

The project to expand the Kraków branch of LPP, located on Bagrowa Street, began in March 2016. – We needed a more flexible space tailored to the needs of our Kraków teams. We knew that our existing office infrastructure, due to the solutions applied there, does not allow for introduction of any additional facilities, so we decided to start conceptual and design work on the new seat. Finally, the outcome responds to the demanding requirements of two fashion brands – Mohito and House. In almost two years, a modern building designed for almost 400 people was built. Due to the current situation, today not everyone can yet enjoy the facilities, because most people work remotely, but technically we are ready to welcome all employees – says Łukasz Piwoński, Administrative and Technical Director, LPP.

The office building with a total area of 9 thousand square metres is a three-storey building, which, despite the current situation and the fact that the company suspended most of its investments, including, among others, the extension of the headquarters in Gdańsk, was completed due to the advanced stage of construction. The construction and assembly works were handled by Re-Bau Sp. Z o.o., a local company , which managed to complete the first stage of the investment just one year after the start of works. The interior design and functionality of the space was the entrusted to the clothing company’s long-term business partner – Studio 1:1, a Tri-City company, which also designed the headquarters of LPP Fashion Lab in Gdańsk. The modern look of the façade is the idea of Tomasz Zawisza, an architect from Kraków experienced in design and execution of the construction of “green” properties.

The company wanted to create a headquarters that would combine comfort for employees and energy efficiency. For this purpose, the company decided to implement BMS (Building Management System) which manages the automation of the building. It is primarily responsible for reducing energy consumption of the applied solutions, while maintaining thermal comfort of the interiors. To this end, the air recovery system, among others, was used, whereby heat in the building is recovered from the exhaust air, reducing energy demand, ensuring filtration of rooms from pollution and dust, and leaving fresh air in. In addition, the air handling units are equipped with the highest quality filters, trapping PM2.5 and PM10 particles, as well as chambers with UV lamps eliminating germs. The windows are fitted with low-emission glass – popular in green buildings, and the floors are lined with anti-allergic flooring. All this, combined with the maximum use of daylight potential and live plants, has been implemented with the comfort of employees in mind.

Appropriate arrangement of space is very important in the work of creative teams. For this purpose, light colouring in the rooms, among other things, was used to provide a great background for the designed collections. Thanks to the workshop areas, where the design workstations are combined with the store arrangement, each team has a chance to test their ideas in conditions which mirror those in which the customers then make their purchases. In place of the existing warehouse building, the construction of a pilot store is also planned, which will be an additional space for testing design concepts.

Meeting zones have also been provided. On the ground floor, there are conference rooms and open spaces with bar stools. Similarly to LPP headquarters in Gdańsk, also the Kraków office has been equipped with phone booths with an increased sound absorption coefficient, which allows for comfortable conversation. The whole interior is complemented by an almost 300-metre-long canteen, with a full culinary offer and a separate cafeteria zone.

In the interest of employees’ well-being, their numerous sports passions were also taken into account. To this end, the space outside the facility is complemented not only by benches for socialising, but also a mini gym or a basketball court, which was created near the pre-existing beach volleyball court. In the near future, there will also be a charging station for electric cars. Once everyone returns to the stationary mode of work, it is also planned to announce a competition among employees for the name of the new building. The same was done in the case of the company’s headquarters in Gdańsk, where the employees jointly decided to name the offices on Łąkowa Street “Fashion Lab”.

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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 30 markets. LPP plays another important role as it employs over 25 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 withdrawals from contracts with shopping centres as a step towards new agreements

The Management Board of LPP decided to withdraw from some of the contracts concerning the lease of space in shopping centres in Poland. The contracts concern approximately 29.5% of the total retail space used by LPP Group. The decision is driven by the concern for the company’s interest in the face of the effects of the COVID-19 pandemic on trade. At the same time, the company expresses its willingness to enter into talks with the shopping centres about new agreements that would include conditions adjusted to the new circumstances.

The new retail reality after the opening of the shopping centres will differ from what we knew before the announcement of the pandemic. Shopping in gloves, masks and face shields and many other safety restrictions will significantly affect the comfort and psychology of shopping, thus discouraging customers. Concerns related to mingling in large groups of people, compounded by limited access to shopping centres for many months, will not allow the centres to meet the goals and services for which they were built. As the Gdańsk company forecasts, revenues in brick and mortar stores will probably not exceed even 30% of last year’s levels in comparable periods.

– Rents at the current level are not justified in any way, taking into account the limited range of services which, due to trade restrictions, shopping centres can currently provide to the users of premises and their customers. Failure to adjust the amounts of rents to the current situation of the shopping centres would be tantamount to closing the stores and thus laying off employees, which is something we are trying to avoid at all costs. For several weeks now, we have been speaking out about the tragic situation of the whole trade and service sector. If we want to keep jobs, we need to adapt the conditions of carrying out commercial activity, including in particular lease costs, to the new reality as soon as possible. Every day of delay in this matter increases the risk of a gigantic wave of lay-offs. That is why we have to make decisions here and now, based on the methods available and on our existing knowledge about the long-term effects of the epidemic – comments Sławomir Łoboda, Vice President of the Management Board in LPP.

According to the stance of the Management Board of LPP, the contracts hitherto in force are inadequate given the new circumstances in which shopping centres and users of space in these centres will operate.

– We are witnessing unprecedented and permanent changes in economic and social relations, which require all parties to adapt to the new reality accordingly. If the owners of the shopping centres fail to verify the method of settling the lease costs, we will have to close the stores. However, we still believe that based on a constructive dialogue with the shopping centres, we will be able to work out solutions that are fair to both parties. – adds Sławomir Łoboda.

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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 30 markets. LPP plays another important role as it employs over 25 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 Supervisory Board of LPP resigned from remuneration for the time of the crisis

• Members of the Supervisory Board of the Polish clothing manufacturer resigned from their remuneration until the company’s financial situation becomes stable again

• The decision of the supervisory body of LPP was taken as a gesture of solidarity with the company’s Management Board and all its employees in the face of the crisis caused by the COVID-19 pandemic

• All activities undertaken so far by the Management Board and Supervisory Board of LPP are aimed at maintaining the stable situation of the company and preserving as many jobs as possible.

Since March this year, when significant restrictions on commercial activities came into force, LPP has been implementing a number of solutions aimed at maintaining the company’s financial liquidity. Securing the company’s operations while recovering from the crisis, and thus preserving as many jobs as possible, are the primary objectives driving all decisions taken by the governing bodies of LPP. Resignation from remuneration by members of the Supervisory Board is yet another step in this direction.

– As members of the Supervisory Board of LPP, we are not indifferent to the challenges currently faced by the entire company. Bearing in mind above all the safety of its employees as well as long-standing business partners, as a gesture of solidarity with the company’s Management Board, we have decided, together with other members of the Board, that until the financial situation becomes stable again, we will not receive remuneration for the functions performed. We are convinced that all forms of expenditure restraint in this exceptional situation are necessary for a company with such a long-standing tradition on the market in order to survive and grow over the decades to come – comments Wojciech Olejniczak, Vice-Chairman of the Supervisory Board.

The resignation from remuneration by members of the Supervisory Board is another action taken in recent days, after the reduction of the Management Board remuneration. The Management Board of LPP also recommended that the Supervisory Board should pay no dividend for the financial year ended 31 January 2020. At the same time, the company is introducing a number of actions aimed at optimizing areas supporting the company’s operations during the epidemic and during the period of recovery from the recession, i.e. significant reduction of capital expenditure or strengthening of the e-commerce channel.

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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 30 markets. LPP plays another important role as it employs over 25 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.