New directions for the LPP business strategy. In 2023 the company will debut in three new markets
• The financial condition of the Polish clothing company remains stable. LPP’s estimated revenue for 2022/23, excluding the Ukrainian and Russian markets, may exceed PLN 16 billion, which implies an increase in sales by 13% y/y.
• The Gdańsk-based company also forecasts further growth in the e-commerce sector, where sales should exceed PLN 5 billion by the end of the current financial year.
• The company plans a successive development of its retail footprint and over 500 thousand sq m of new retail space.
• In 2023 LPP will debut on three new markets by opening its own Sinsay brand stores in Italy and Greece, as well as Reserved franchise stores in Cyprus.
• The company intends to continue the development of the Reserved retail chain in Germany and Great Britain.
The decision to suspend business activity in Ukraine and to discontinue all sales, both online and in retail stores on the Russian market, means a nearly 25% loss of revenue for LPP. As a response to the difficult and unstable situation in the region, which has so far been one of the most promising for the company, the company decided to set new directions in its development strategy. LPP’s business plans will include activities aimed at increasing the availability of the brands offered by the Polish clothing manufacturers in EU countries, both in terms of increasing the retail footprint of the company’s stores in current markets and further foreign expansion in Europe.
– After the difficult times of the pandemic, we faced new challenges related to the considerable loss of the sales network. Despite this, the company’s condition remains stable, and the expected revenues for the current financial year amount to over PLN 16 billion, which allows us to think about the future of LPP with optimism. On the other hand, given the inability to predict the future situation in war-stricken Ukraine, we have decided to focus our development on the European Union countries, where we are already present in the market. At the same time, we want to establish ourselves in new markets, especially in Southern Europe, where we see a development potential for our brands. We believe that these particular decisions and ambitious plans for further international expansion will allow us to maintain the Group’s stable condition, regardless of the situation in the Eastern markets,” – says Przemysław Lutkiewicz, Vice-President of LPP.
During the current financial year, the Gdańsk-based company plans to open over 500 new stores with a total retail area of around 500,000 m2. Simultaneous development activities, conducted both on new and existing markets, are intended to compensate for the losses resulting from the military conflict behind the eastern border and to strengthen the market positioning of all LPP brands in Europe, with particular emphasis on the Sinsay brand.
– Our immediate goal is to focus on developing our youngest brand and, still this year, we plan to open as many as 440 Sinsay stores. By doing so, we want to develop two solid pillars of the company – Reserved, our flagship brand, and Sinsay, and to implement further expansion plans from this stable position. Yet we do not limit our activities to these two brands only. By the end of this year, our sales network will have been expanded by another 100 stores of our other brands,’ – emphasises Przemysław Lutkiewicz.
Plans to introduce the full range of LPP brands to Albania in 2022 are also in progress, while in 2023 the company wants to debut in three new markets. The Sinsay brand will open its stores in Greece and Italy, and the first Reserved franchise stores will open in Cyprus. The development of the Reserved retail chain in Germany and Great Britain will also be continued.
– The considerable interest shown by Italian customers in our pan-European online store has encouraged us to open Sinsay retail stores in that country. Equally promising is the Greek market, which we treat as a logical direction for further expansion in the Balkans. We also want our Reserved brand to reach customers in Cyprus through franchise stores. What is important, as we observe a growing interest in the Sinsay home line, we do not exclude the possibility of extending the Reserved product range in this direction. Concurrently, we want to expand the Reserved online offer so that it meets the expectations of both current and new clients even better,’ – declares Lutkiewicz, the Vice-President of LPP.
This year, the company will not only focus on the expansion of the foreign retail store network, but also on the development of its e-commerce branch, which in the fourth quarter of 2021/22 reached 30% of the total sales. This year, according to the company’s estimates, the value of revenue from online sales may reach even PLN 5 billion. The company sees great potential in this area in countries such as Austria, Italy and Germany.
New circumstances and shifts in the global economy have forced the company to refocus its business activities from the eastern markets to the central, southern and western parts of Europe. However, it does not change the adopted assumptions to strengthen LPP as a fully omnichannel company, while using the assets developed during the pandemic. Similarly to the previous years, the company focuses on a flexible approach to customer needs and expectations, which is reflected in the announced development plans.
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LPP is a Polish family company, one of the most rapidly growing in the apparel industry in the Central and Eastern Europe region. For 30 years, it has been successful in Poland and abroad, selling collections in 25 markets, including such prestigious capitals as London, Berlin and Tel Aviv. The online range is available in 30 markets. LPP manages 5 fashion brands: Reserved, Cropp, House, Mohito and Sinsay. At the end of 2000, the company had a network with over 2,000 sales outlets of a total surface exceeding 1.7 million m2. Based on the global supply network, the Polish clothes manufacturer distributes over 259 million clothing items to three continents per year. LPP also has an important role in creating jobs for nearly 27,000 people in offices and sales structures in Poland, Europe, Asia and Africa. The company is quoted on the Warsaw Stock Exchange under the WIG20 Index and belongs to the prestigious MSCI Poland Index.