In Q1 2017, LPP’s revenues reached nearly PLN 1.4 billion and increased by 16% as compared to the same period last year. The gross margin was 45.6%. This is the subsequent quarter in a row when sales in the so-called comparable stores (LFL) featured an increase by almost 5% across the entire group. Nevertheless, the increase in revenue in the e-commerce segment is an especially important indicator – it equalled 100% as compared to the Q1 2016. By building the brand’s global recognition, on 17 May, the Company is opening the flagship Reserved outlet in yet another European capital – Berlin. This is already the brand’s 19th outlet in Germany.
The increase in sales in comparable stores proves that the strategy adopted by us has a positive effect. Sales are growing not only due to new stores openings – it is also shown in the data on sales per sq.m. of surface area. Our collections this year were particularly well received by women – says Przemysław Lutkiewicz, LPP Vice President and CFO. The new clearance policy introduced at the beginning of the year allowed us to reduce costs associated with maintaining inventory and transporting end pieces of collection lines. At the same time, we could offer our customers attractive prices for these models – which affected the margin in the first quarter. As a result, the Company is reducing the burden of maintaining a large inventory of collections from previous seasons – he adds.
The on-line sales total is already 4% for the entire LPP group sales, while in Poland it is 6%. We are getting closer to reaching the 2020 target of 7-8% for Internet sales across the entire group. In 2017, the Company plans to open more flagship stores in Western Europe.
Sinsay recorded the biggest increase – due to its dynamic growth in Poland and abroad. In Q1 2017 the retail sales of this group per sq.m. increased by 9.5% when compared to Q1 2016. The largest increase in LPP sales was recorded in Eastern Europe – almost 32% when compared year to year.
The beginning of 2017 was also a time for debuts in new markets for LPP – based on franchise agreements, the Company opened three brand stores in Minsk – Reserved, Cropp and House. Thanks to the selected model of cooperation, the Company does not bear any investment or operating costs associated with these stores.
Today, 17 May, Berlin’s new Reserved flagship store will be welcomed by Berliners. The Company’s main brand salon is situated in a prestigious location on one of the most popular shopping streets in Berlin – Tauentzienstraße 18 in the Charlottenburg district. On the occasion of launching this 4-storey facility of 2,000 sq.m. the residents and tourists will enjoy many attractions. This is the third opening in Germany this year, the previous ones took place in Q1 2017 when the Company launched Reserved flagship showrooms in Hamburg and Cologne.
Another Reserved store opening is scheduled for the second half of 2017 in London. Even before the opening of the facility on Oxford St., the Reserved on-line store will be launched in the UK. At the end of the year, LPP also plans to open a brand name salon in Kazakhstan based on the franchise model. By the end of the year, the Company plans to be present on four new markets in total – apart from those listed also in Serbia (own store). Foreign expansion will also be strengthened by the on-line sale of all the brands in Lithuania, Latvia and Estonia (in the first half of 2017), as well as in Russia and Ukraine (by the end of the year).
LPP SA is one of the most dynamic apparel companies in Central and Eastern Europe. The Company has been consistently operating in Poland and abroad for more than 20 years, successful in business on the demanding apparel market. LPP SA manages 5 fashion brands: Reserved, Cropp, House, Mohito and Sinsay. The Company has a network of over 1,600 sales outlets plus on-line stores of all its brands – it creates jobs for more than 22,000 employees in offices and sales structures in Poland, European, Asian and African countries. LPP SA is listed on the Warsaw Stock Exchange within the WIG20 Index and it belongs to the prestigious MSCI Poland Index.