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LPP S.A. Press room LPP Substantially Increases Its Revenue and Doubles Its Profit in the First Half of 2017

LPP Substantially Increases Its Revenue and Doubles Its Profit in the First Half of 2017

30.08.2017
  • LPP reached PLN 3bn in revenue in the first six months of 2017. This is a 15% increase compared to the same period in 2016
  • The Company gained a net profit of PLN 56m, with that figure being doubled compared to the last year’s result
  • In H1 2017, sales through e-commerce reached 104% y/y

The first half of 2017 was far better for LPP than the same period last year. The sales increased by 15% to reach as much as PLN 3bn, and the company generated a net profit of PLN 56m, i.e. a double figure compared to the same period last year. This is the outcome of results generated by LPP in the second quarter of 2017. The gross margin increased substantially, i.e. by more than 6.5 p.p, thus reaching almost 57% y/y.

Przemysław Lutkiewicz, Vice-President and Finance Director of LPP explains: This is attributable to a well-designed collection and, specifically, the positive reception by customers of the spring/summer offers of Reserved and Mohito. I am also pleased with the visible effects of changes we have made in our goods management policy. We aim at maximizing the margin during months when new collections are being sold and, simultaneously, at having them sold almost in full in stores. This is our way to avoid the costs of returns and transportation to a post-seasonal storage facility.

In the first half of 2017, sales in like-for-like stores (LFL) increased by 5.5%, which confirms that we were right in choosing our strategy. The company recorded high increases also in e-commerce as, in the first six months of 2017, it doubled the value of sales to reach PLN 140m. It should be emphasized that, in the second quarter of 2017, revenues from online sales yielded already 7% of domestic revenues and 5% of the entire Group’s revenues.

Mr Lutkiewicz adds: The result yielded by online stores is the outcome of our major e-commerce investments involving development of our technological solutions and the expansion of the network of online stores operating abroad.

Having increased its profits, the company continues its dynamic development, also in foreign countries. Last quarter, brands owned by the Group had their debuts in Berlin (Reserved) and Minsk (Reserved, Cropp and House). Online stores of all five brands have been available already since April in Lithuania, Latvia and Estonia. In total, LPP operates already 45 e-stores. As soon as September, London will become yet another European capital with Reserved in operation.

To meet the requirements of its highly dynamic development, LPP plans to open another logistics centre and has started the construction of its head office in Gdańsk. The company will appropriate in total PLN 390m for both these projects. In the second quarter of 2017, LPP’s flagship brand Reserved recorded revenues exceeding PLN 762.6m (increase by 14% y/y), to be followed by Cropp with almost PLN 254m (9.3% y/y), Mohito with PLN 212m (15.7% y/y), House (PLN 181m, decrease by 4.2% y/y) and Sinsay with PLN 148.5m (26.6% – the largest percentage increase in sales y/y).

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LPP SA is one of the most dynamically developing clothing companies in Central and Eastern Europe. For 26 years, the company has been consistently operating in Poland and abroad, recording success on a very demanding textile market. LPP SA manages 5 fashion brands: Reserved, Cropp, House, Mohito and Sinsay. The company has a chain of almost 1700 retail stores as well as online stores of all of its brands, creating workplaces for approx. 25 thousand people in its offices and sales structures in Poland and the countries of Europe, Asia and Africa. LPP SA is listed on the Warsaw Stock Exchange in WIG20 index and a prestigious MSCI Poland index.