Financial results of LPP for the third quarter of 2015

The expansion of the brand flagship collection, commitment to the quality of products and rapid development of an e-commerce channel are the activities that LPP has introduced to strengthen the competitiveness of the offer. Strategic business development goals remain unchanged. In 2016, the owner of five popular clothing brands – RESERVED, Cropp, House, MOHITO and SiNSAY will allocate a significant part of the acquired resources to investment and it will increase the retail space by another 15 percent. The company announced its results for the third quarter of 2015.   The revenues from sales realized in the third quarter of 2015 amounted to over PLN 1.2 billion and increased by 2 percent year on year. In the analysed period, the company generated a net profit of nearly PLN 80 million and opened new stores with a total surface area of over 20 thousand sqm., thereby increasing its retail space to almost 800 thousand sqm. The revenue from sales in the Group’s comparable stores (LFL) decreased in the third quarter by 1.5 percent, which was mainly due to external factors. Due to the record high temperatures at the end of summer in our region, in August and September the customers were not buying the autumn collection yet. Positive results of LFL in local currencies were reported by the company in Russia and Ukraine, as well as in the Baltic countries.   Looking at our results, and also at market trends, we decided to focus on three, in our opinion, major tasks. We increase the number of models in the collections of our flagship RESERVED brand by as many as 50 per cent, thanks to which we can adjust our offer to the specific character of stores’ location and size. At the same time, in all five brands we put even greater emphasis on the quality of products and we select the best possible fabrics. We also develop online sales – within a few years, we would like to have online shops in most of the countries in which we have brick and mortar stores. All of those activities are undertaken in order to strengthen our position against global competitors and clothing e-platforms that are growing in strength – says Przemysław Lutkiewicz, Vice President of LPP.   The long-term business strategy of LPP assumes the dynamic development of sales network in both the countries in which the company already has its stores and in new markets in Western Europe and the Middle East. Two times higher sales per metre than the average in Poland, achieved in the first months of the stores’ operation, encourages us to develop in the latter region.   We are confident that apart from attractive offer, it is primarily the reach of our sales network that is the key to success. Therefore, we do not slow down and in 2016 we would like to increase our retail space by 15 percent, that is by as much as 125 thousand sqm. To achieve this objective, the total value of investment in our brands stores will amount to nearly PLN 300 million –adds Przemysław Lutkiewicz.     LPP SA, a company listed on the Warsaw Stock Exchange since 2001, is one of the fastest growing clothing companies in the region of Central and Eastern Europe. For 20 years, the company has been consistently operating in Poland and abroad, being successful on the demanding clothing market. LPP SA manages 5 popular fashion brands (RESERVED, Cropp, House, MOHITO and SiNSAY), a network of nearly 1,600 shops, creating workplaces for nearly 20 thousand people at its offices and sales structures in Poland, Europe, Asia and Africa. The company invests and acquires new markets. In 2015, the company opened for example stores in Egypt, Kuwait, Qatar and Saudi Arabia. In 2014, the company advanced to the stock exchange index WIG20, which generates a significant part of the turnover on the Warsaw Stock Exchange, and belongs to the prestigious MSCI Poland index.   Contact for the media: Marta Chlewicka acting Press Spokesman e-mail: media@lppsa.com

The financial results of LPP SA for the first quarter of 2015.

In the first quarter of 2015 LPP SA, the owner of five popular clothing brands (Reserved, Cropp, House, MOHITO and SiNSAY) achieved revenue from sales of 1 003 millions PLN. That’s about 6 percent more compared to the same period last year. The company adjusts its investment plans to the current external conditions, does not change the long-term strategy and continues to develop in new markets – including Germany and the Middle East.

Total sales in the first quarter of 2015 years amounted to 1 003 millions PLN. They increased by about 6 percent compared with the result achieved in the same period of 2014. At the end of March 2015, the company had 1,528 stores of its brands with a total area of ​​almost 750 thousand. sqm, which translated into an increase on the level of 23.5 percent. compared to the previous year. Since the beginning of January to the end of March 2015, the company generated a profit from operations in the amount of 23.7 millions PLN, while revenue from sales in the so-called. comparable stores in the first quarter of 2015 years fell by 0.7 percent. (Excluding changes in exchange of local currencies, in countries where the group companies operate).

The results of the first quarter resulted mainly from external factors. We strongly feel the devaluation of the Russian currency, while a very high dollar exchange rate. Furthermore, the entire industry in Poland notice the decline, in the number of customers visiting shopping centers – says Przemysław Lutkiewicz, Executive Vice President and Chief Financial Officer of LPP. We have no influence on the macroeconomic and global political situation, which affects both consumer sentiment and economic situation in the respective markets. Our activities currently focus on cost reduction – we successfully negotiate lease terms of retail spaces, and investing in new markets to diversify risk and sources of revenue.

Due to the political and economic situation of LPP decided to temporarily suspend network development in Russia and Ukraine, while the existing stores in these countries operate unchanged. It is for us a very important region, and sales in Russia remained at a high level, therefore, we carefully observe the conditions for investment and do not rule out the further development of the network in these countries, in the coming years – says Przemysław Lutkiewicz.

According to the strategy the company continues debuts in new markets. In the first quarter of 2015, LPP flagship brand RESERVED made its debut in the Middle East. So far we opened stores in Egypt, Qatar and Kuwait, and in the second half of the year are planned to open stores in Saudi Arabia and the United Arab Emirates. Over the next six years, LPP, in cooperation with the local franchisee, plans to launch in the Middle East about 30 stores of its brands. In parallel LPP expands its operations in Western Europe – the company continues started in 2014 investments in Germany – by the end of March 2015, we opened 6 RESERVED stores, and over the next three years, we plan to open around 30. Expenditures for image-building activities, which are primarily aimed at building brand recognition in this market amounts to 4 million euros per annum.

An important element in the development of LPP is also building an e-commerce facilities. Products of all brands of LPP are now available on-line in Poland. Currently, online sales represents almost 2 percent. income groups, but the rate of growth makes that company invests in this form of sales on other markets. RESERVED offer is available on the network in Germany and the Czech Republic, in the second half of the year we will start on-line store of the this brand in Slovakia.

LPP, a company listed on the Warsaw Stock Exchange since 2001, is one of the fastest growing clothing companies. For years, we consistently conduct our operations in Poland and abroad, being successful on the demanding clothing market. The company manages five well-known fashion brands, a network of over 1,500 stores, creating jobs for nearly 18 thousands of people at its offices and sales structures in Poland, European countries and in Shanghai and Dhaka. The company continually invests and acquires new markets. In 2014 our company advanced to the stock exchange index WIG20, which generates a significant part of the turnover on the Warsaw Stock Exchange and belongs to the prestigious MSCI Poland stock exchange index.

Media contact:
Marta Chlewicka
Acting Spokesperson
e-mail: media@lppsa.com.

 

 

LPP pursues long-term development plan

Revenue from sales at the level 1.234 billion PLN, operating profit in the amount of 134 million pln and surface area of the chain of stores higher by 15 thousand sq.m. The clothing group LPP announced the results for the third quarter of 2014. After the September debut on the German market, the company also informed of the opening of the first stores the Reserved, Cropp, House, Mohito and Sinsay brands in the Balkans.

Revenue for the third quarter of 2014 are about 11 percent higher compared with that achieved in the IIIQ of 2013 (1.107 billion PLN). In the period July-September 2014, the commercial space also increased (to 681.2 sq.m). In total, at the end of September, the company had 1,453 stores. In the IIIQ of 2014, sales in the Reserved stores reached the level of 580 million PLN, in CROPP stores – 221 million pln, House – 165 million pln in Mohito stores – 134 million PLN and in Sinsay stores 59 million pln. Operating profit amounted to 134 million pln, net profit – 82 million pln.

Over the past 3 months, we focused on building sales network both in Poland and abroad. We began operations on the German market, which was completely new to us and also made preparations for entry into the Balkans.  In so doing, we accomplished our global ambitions and long-term development plan – “said Dariusz Pachla, LPP Vice President. Unfortunately, in the third quarter we were unable, accomplish assumed financial results. Short-term data, however, depends on multiple variable factors, for instance, the weather and, therefore, does not determine our strength and capabilities. For us, the most important is the realization of the dynamic growth strategy – explained Dariusz Pachla.

LPP is through with the launch of business operations on the first Western European market. In September and October, the company launched Reserved shops in Stuttgart, Recklinghausen and Bremen. In November, the brand will debut in Hanover. LPP has already signed an agreement for the opening of flagship shops along the main commercial streets of Berlin (2,000 sq.m) and Mannheim (2.4 thousand sq.m) in 2016. In October, the Group also began operations in Croatia (Reserved, Cropp, House, Mohito and Sinsay stores in the Arena Shopping Centre in Zagreb, Croatia), and in the Middle East, in Qatar, the Reserved brand will welcome its first customers at the beginning of 2015.

LPP, a company listed on the WSE in Warsaw since 2001, is one of the most dynamically developing companies in the clothing sector. Over the years, it has consistently conducted business activities in Poland and abroad, achieving success on the demanding clothing market. The group manages the 5 well-known fashion brands with a chain of nearly 1,500 stores, creating jobs for almost 18 thousand persons in offices and sales structures in Poland, countries of Central and Eastern Europe as well as in Shanghai. The company continues to invest and acquire new markets. In March 2014, the company advanced to the stock exchange WIG20 index that generates a significant part of the turnover on the WSE in Warsaw and since August 2014 is also listed on the MSCI Poland index.

Contact for the media:

Marta Chlewicka

Acting Press Officer

e-mail: media@lppsa.com

LPP’s consolidated results for the first quarter of 2014

LPP’s financial situation after the first quarter of 2014 is very good – the company’s sales revenues grew as a result of increased retail space and sales in stores. Despite the difficult situation in the East, which had an impact on our current results, the company continues to grow as it diversifies into three new sales markets. We are planning to open our first stores in Western Europe and in Arabic countries this autumn.   In the first quarter, LPP’s total revenues from sales were 26% higher compared to the same period last year, amounting to 945 million PLN. This is a consequence of increased retail space and a 7% growth in sales in stores. The percentage margin in the period in question rose by 1.1 percentage points to reach 56.9%. As previously announced, LPP has continued to dynamically develop its store chains, with the total store area growing last year by 153,000 square meters (i.e. by 34%), reaching 606,000 square meters at the end of March 2014.   Additionally, LPP’s operating costs grew by 24% in the first quarter of this year, which corresponded to an 87% increase in earnings before income and taxes, giving the total of 48.4 million PLN (this is significantly less than the increase in sales).   LPP’s Q1 2014 financial results were also affected by the situation in the Eastern market. Foreign exchange losses, resulting from lower values of the Russian rouble and the Ukrainian hryvna, amounted to 57.4 million PLN, impacted the net result, bringing about a loss of 14.3 million PLN.   “In March and April we reviewed our retail chain development plans. This review included a more cautious approach to the Russian and Ukrainian markets. That said, we don’t think it will significantly impact our plans for retail chain development. We have assumed that the increase in retail space will be 25%, which is only 3% less than our original assumption. By the end of 2014, LPP should have 737,000 square meters of retail space and 1551 stores,” says Dariusz Pachla, Deputy President of LPP’s Management Board. “We are searching for new growth opportunities to reinforce our market position. That is why, irrespective of the situation in Russia and Ukraine, we are on the lookout for new markets that will enable us to grow. Already this autumn we have set out to begin operating in Germany, opening 3 new Reserved stores.”   The company is also planning to open stores in Croatia (5 stores of each brand: Reserved, Mohito, House, Cropp and Sinsay). Moreover, towards the end of the year our first store outside of Europe will probably open in Qatar, under a Reserved franchise agreement with Azadea.   LPP, a company listed on the Warsaw Stock Exchange since 2001, is one of the most dynamically developing clothing companies. It has been steadily growing its business in Poland and abroad for a number of years, and has enjoyed a remarkable success in the clothing industry. The company manages 5 well-known fashion brands, a chain of 1400 stores, employing almost 18,000 people in offices and sales structures in Poland, in other Central and Eastern European countries, and in Shanghai. LPP continues to make new investments and win new markets. In March 2014, the company entered the WIG20 Index, which generates a significant part of the trading turnover on WSE.

LPP, the clothing company, grows as it enters new markets

koncern odzieżowy - header The total sales of LPP Capital Group, the owner of 5 popular clothing brands (RESERVED, Cropp, House, MOHITO and SiNSAY), grew in the first half-year of 2014. The company increased its retail space and its sales in LPP-brand stores both in Poland and in foreign markets. The Group is facing a new challenge as LPP’s clothing brands will debut in Germany, Croatia and the Middle East.   “In the first months of this year, we focused mainly on preparing our debut in the German market, and kept a close eye on the Eastern market. Owing to the dynamic developments in Ukraine and Russia, we have reviewed our plans a little for this region. The increase in retail space there in 2014 will be 33% rather than 52% as we originally planned. The total increase in space for all countries will therefore be around 23% instead of the originally intended 28%. At the same time, we are finalising the first stage of LPP’s venture beyond Poland’s western border, with the first RESERVED stores in Germany opening this autumn. We are also taking our business outside Europe as soon our first store begins operating in Qatar. Another important event is the debut of our five brands in the Croatian market in the autumn,” says Dariusz Pachla, Deputy President of LPP’s Management Board. “We have been the leader in the Polish clothing industry for a number of years, and we are strengthening our position in the Central and Eastern Europe. As for the investments in Germany, the Balkans and the Middle East, they mark the beginning of our global ambitions.”   In the first half of the year, LPP’s total revenues from sales were 22.3% higher compared to the same period of the previous year, amounting to 2,130,000 PLN. This is a consequence of increased retail space and higher sales in stores. The percentage margin in the period in question rose by 1.6 percentage points to reach 59.3%. Total retail space grew by 35% compared to June 2013, reaching 674,000 square meters, and the number of LPP-brand stores at the end of the first half-year of 2014 was 1488. As a result, LPP closed the first half-year of 2014 with a net profit of 154,192,000 PLN, a 10 percentage point increase compared to the profit achieved in the same period last year.   Despite the improvement of the situation in the second half of the year, throughout the first half of the year LPP’s results were considerably influenced by foreign exchange losses of 27 million PLN. This concerned mainly the Russian rouble and the Ukrainian hryvna. Owing to the unstable economic situation in Russia and Ukraine, LPP has slightly scaled down its investment in the region.   LPP’s operating costs increased by 25.9% compared to the first half-year of 2013, and earnings before income and taxes rose by 21.2% in comparison to last year’s EBIT, reaching 246,479,000 PLN.   LPP, a company listed on the Warsaw Stock Exchange from 2001, is one of the most dynamically developing clothing companies. It has been steadily growing its business in Poland and abroad for a number of years, and has enjoyed remarkable success in the clothing industry. The company manages 5 well-known fashion brands, a chain of 1500 stores, employing nearly 18,000 people in the offices and sales structures in Poland as well as other Central and Eastern European countries, and Shanghai. LPP continues to make new investments and win new markets. In March 2014, the company entered the WIG20 Index, which generates a significant part of the trading turnover on WSE.

LPP intensifies its expansion

news_lppwzmacniaekspansje_header LPP intensifies its expansion in the West – RESERVED clothing now available in the largest European market. As previously announced, LPP is pursuing its expansion into the German market. The company has signed new contracts to open RESERVED flagship stores in further locations in Germany, including Berlin, where LPP’s first flagship store will be set up. LPP has an ambitious plan to open 30 new RESERVED stores in this market over the next three years.   LPP’s expansion in the West is undoubtedly one of the key decisions made by the Management Board in recent years, aiming to boost the company’s growth and reinforce its position on the international arena. Under the newly signed contract, LPP’s new flagship store will open in a prestigious location – at Tauentzienstraße 18, a major shopping street in the western inner city of Berlin. As per the investment assumptions, in the last quarter of 2016 LPP will be selling its RESERVED products in an area covering 2000 square meters. And as far as other locations go, the RESERVED clothing store chain will lease a massive 2400 square meters of retail space in the Palace shopping mall on Planken Street in Mannheim, a city with over 300,000 inhabitants.   “Germany is the largest clothing market in Europe and fourth largest in the world. It is very well established and promotes the presence of international brands,” says Piotr Dyka, Deputy President of LPP’s Management Board, who is responsible for the Reserved brand in Poland and abroad. “We are operating in a business where being on the lookout for new growth opportunities is key. We want to be present in the most prestigious fashion streets in Europe. Opening a clothing store in Berlin highlights our expansion strategy, whose objective is to open new stores in renowned locations in the largest German cities. By the end of the year, we will have opened 3 more RESERVED stores in this market.”   The first RESERVED store in Germany opened this September in the Palais Vest shopping mall in Recklinghausen, with new openings coming up in Stuttgart and Bremen in November, and Hanover in December. Germany is the first step in our expansion in the West. Simultaneously, we are taking our business to regions that are entirely new for us. This autumn, shops of all LPP brands will open in Croatia, and at the beginning of 2015 our flagship brand, RESERVED, will welcome its first customers in our very first Middle East location in Qatar.   LPP, a company listed on the Warsaw Stock Exchange from 2001, is one of the most dynamically developing clothing companies. In 2013 alone, the company sold over 70 million items of clothing, with the turnover reaching over 1 billion euro. It has been steadily growing its business in Poland and abroad for a number of years now, and has enjoyed remarkable success in the clothing industry. The company manages 5 well-known fashion brands, and plans to launch another in 2016. LPP runs a chain of 1500 stores, employing nearly 18,000 people in its offices and sales structures in Poland, other Central and Eastern European countries, and Shanghai. In March 2014, the company entered the WIG20 Index, which generates a significant part of the trading turnover on WSE. At the end of August, the company’s shares were included in the prestigious MSCI Poland Investable Market Index. The current market value of LPP is estimated at 4 billion euro.