• In the third quarter of the 2021/22 financial year the revenues of the Polish clothing manufacturer increased by 60% YoY and amounted to nearly PLN 4 billion.
• The past quarter saw LPP double its e-commerce turnover and return to triple-digit growth. Therefore, the company recorded online sales increase by 85% between February and October, compared to a year ago.
• The company once again achieved higher revenues from abroad, which in Q3 2021/22 already accounted for 57% of the Group’s revenue.
• After 9 months, LPP’s omnichannel revenues growth was 72% compared to the same period last year, providing the company with over PLN 1 billion in net profit.
The next quarter of the current financial year was marked by intensive development of LPP in the omnichannel model. In accordance with the adopted strategy, the Polish clothing manufacturer has been strengthening e-commerce sales while implementing plans to increase retail space in the traditional channel. As at the end of October this year, the company already had more than 2,100 stationary stores in 26 markets, and the online offer was available in 31 countries. As a result, in the third quarter of 2021/22 the company increased its revenues by 60%, which amounted to almost PLN 4 billion. At the same time, it generated a net profit of over PLN 1 billion since the beginning of this financial year, with revenue growth of more than 72% in the period.
– Thanks to well-thought-out collections and the implementation of the omnichannel strategy, in the third quarter our company was still able to benefit from the persistent effect of deferred demand. The gradual increase in the availability of our brands’ offer, supported by the facilities our customers can enjoy thanks to the omnichannel sales model, resulted in an increase in the company’s sales by over 72% YoY in the nine-month period of this year. Good results are also due to a favourable gross margin, which at the end of the third quarter amounted to over 58%. This significantly higher level compared to last year is on the one hand the effect of more favourable purchase prices of the autumn/winter collection and, on the other hand, lower discounts in the sell-offs compared to last year due to lower availability of goods resulting from disturbances in the supply chains – comments Przemysław Lutkiewicz, Vice-President of LPP.
For the Polish clothing company, the last quarter was also a time of doubling its turnover from online sales. The triple-digit dynamics in this channel in the period from August to October contributed to an increase in sales from the beginning of the year by 85%. Despite the gradual return of customers to traditional shopping, the share of online sales in the Group’s revenues continues to grow successively. In the third quarter of this year, it already accounted for over 23% of sales in all countries.
– The 147% YoY increase in online sales in Europe in the third quarter of this year clearly indicates the growing interest in our brands in this region. We are also pleased with the 120% increase in online sales in Eastern markets. Such good results confirm the correctness of our decisions to invest in logistics and technological facilities that support the process of e-commerce development and omnichannel transition of the company. With the expansion of the logistics network of Fulfillment Centers in Central and Eastern Europe and the entry into a new, 31st online market in Bulgaria, we have taken another step to increase competitiveness in our key markets – adds Przemysław Lutkiewicz.
A 30% YoY increase in the floorspace of the stationary sales network and sustained dynamics of e-commerce gave rise to LPP sales growth in all European countries by 74% YoY. As confirmed by the company’s management board, decisions made in advance as to ordering goods and preparing for the rebound in demand make it possible to respond to customer expectations in all markets. Thus, thanks to the doubling of results in the Czech Republic, Bulgaria, Croatia and Slovenia, as well as in the CIS region, the company ended the third quarter of this year with the share of foreign sales at nearly 57% of Group revenues.
Despite the continuing sense of uncertainty resulting from the aggravation of the pandemic and the turmoil in the supply chains, LPP’s strengthening of its position in key markets and the company’s good financial standing allowed it to introduce mass pay rises for employees. – As a Polish family company we are aware that we could not have achieved such good results without the enormous support of those who create LPP with us – our employees. Given the unquestionable contribution and commitment of all the teams who have supported us in the fight for the company’s survival, today we are able to continue operating and develop further – comments Przemysław Lutkiewicz.
In gratitude for the commitment of the LPP employees, the management board has decided to increase the salaries of all teams. Moreover, a decision was made to introduce changes in the remuneration policy for sales network employees starting the beginning of next year, including a new bonus system. – We hope that the sense of security and new, better employment conditions will allow us and our employees to continue building an efficient and prosperous organisation – concludes the Vice-President of LPP.
Not only do the good financial results of the Polish clothing company allow it to introduce changes in the remuneration policy for all employees working for LPP. It is also an opportunity to fulfil the obligations resulting from the sustainable development strategy and to take actions aimed at limiting the company’s impact on the environment. The company’s consistent actions in this area have real and measurable effects, which was confirmed by the high rating in the “Climate Strategy Benchmark” study, conducted by ESG experts and practitioners from the UNEP/GRID-Warszawa Centre and Go Responsible Poland. Thus, the Gdańsk-based company secured a place as one of the leaders in reporting on climate issues, among the companies of WIG20 and mWiG40 group. LPP’s second place, following the survey of Climate Conscious Companies, is yet another high rating of the company’s environmental impact reporting.
LPP is a Polish family business and one of the fastest growing clothing companies in the region of Central and Eastern Europe. For 30 years it has been successfully operating in Poland and abroad, offering its collections on 26 stationary markets, including in such prestigious capitals as London, Helsinki, Tel Aviv or Moscow. The online offer is available on 31 markets. LPP SA manages five fashion brands: Reserved, Cropp, House, Mohito, and Sinsay. The company has a chain of over 2000 stores with the total area of over 1.7 million sq.m. On the basis of a global supply chain, the Polish clothing producer distributes over 259 million pieces of clothing to three continents. LPP plays another important role as it employs 27 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.