• The revenues of the Polish clothing producer in the first quarter of 2021 amounted to nearly PLN 2.4 bn, which means an increase by over 99% YoY.
• Owing to the ongoing dynamics of online sales, LPP has yet again recorded a triple-digit growth in this channel amounting to over 157% YoY. According to the plan for this year, the company aims at generating PLN 2.8 bn revenues from online sale.
• It was yet another quarter in a row where revenues from abroad exceed the Polish ones. The share of exports in the portfolio of the Gdańsk-based company already amounts to over 61%.
• The company is keeping up this year’s investment plans – allocating PLN 1.2 bn to this end.
The first quarter of the shifted fiscal year, encompassing the period from 1 February until 30 April was marked by the maintained increases in revenues. In said period, the company generated nearly PLN 2.4 bn revenues, which entailed a 99% increase YoY. This result was strongly affected by the triple-digit growth in online sales and the gradual rebound in the stationary sales caused by differences in the timing of lockdowns in particular countries. Flexibility in action, operational support of the e-commerce channel, as well as active following and staying in tune with the customers’ expectations contributed to the company’s net profit amounting to PLN 21.5 mn.
– The first quarter certainly warrants our optimism. We can see that the decisions we had made last year bring about the desired effect month after month. Owing to the activities supporting our growth in the spirit of omnichannel, we are now able to react to the changes occurring in the industry in a more flexible manner. This, in turn, is evidenced by the doubling of revenues YoY – despite more stringent restrictions in the traditional trade as compared to the equivalent period last year. – comments Przemysław Lutkiewicz – Vice-President of the Management Board, LPP. – However, our approach to what lies ahead is still moderately optimistic, as the market is constantly seeking stability. Nevertheless, the rebound of sales in the stores and the maintained e-commerce growth dynamics serve to indicate that both our channels are doing very well. We believe that the target of a double-digit growth in revenues from online sales YoY – up to the level of PLN 2.8 bn – is a very realistic one now. – he adds.
The beginning of the year for the Polish clothing producer was marked by intensive e-commerce growth. The results from online sales in the first quarter already accounted for about 42% of the Group revenues and were higher YoY by over 157%, which translates into inflows at the level of PLN 988.3 mn. The attractiveness of online shopping is also strengthened by the maintained triple-digit dynamics of website visits for the brands and triple digit increase in the number of new and returning customers. In addition, for yet another quarter in a row, the Gdańsk-based company recorded a high number of visits via mobile devices. They accounted for as much as 84% of visits, which generated 68% of e-commerce purchases. With this group of clients in mind, the company launched the first mobile sales app for Reserved store in the Polish language version, which will be developed in the coming months in other languages and for other brands.
In the first quarter, Poland accounted for approximately 41% of online revenues. The highest YoY increases were seen in the CIS region and in the European market. – We are pleased that our online offer is getting stronger in individual markets. This is another quarter in a row where despite the difficult situation in all countries – foreign revenues already accounted for more than 61% of the Group’s revenues. In the past quarter, the CIS region recorded higher revenues than Europe, which may be due to a different approach to lockdowns and closures of stationary stores. On the other hand, in Europe itself we recorded revenue increases in all countries, especially in Romania, which is positively influenced by the development of our logistics network, but also in Slovakia, Latvia and Germany. Equally good news for us is the fact that our pan-European e-store recorded tenfold YoY sales increases. This testifies not only to the effectiveness of our strategy, but also to the fact that the offer of our brands is properly adapted to the taste of the international customer. – explains Przemysław Lutkiewicz.
Thanks to adapting the collection to the new market needs, reducing the volume of the autumn/winter collection and no need for sizeable sell-offs, thus entering the first quarter with a new offer at regular prices – the company generated an increase in margin by 7 p.p., i.e. to 55.5% YoY.
Among the investment targets, at the end of this year, the company maintains its plan to open stores in Northern Macedonia. Thus, the brand’s stationary offer will be available in 26 markets. This year, the company will continue to expand its floorspace with a focus on the CIS region and the development of smaller brands: Cropp, House and Sinsay. Given the growing popularity of the Polish company’s brands in Europe – it will also speed up growth in this region. – The effectiveness of our omnichannel strategy keeps us convinced of the need to implement our plans for the expansion of our stationary stores floorspace. We see further potential for growth in the value for money segment, which is why we are planning more and more openings in smaller towns. – concludes Przemysław Lutkiewicz. – In total, this year the company will allocate about PLN 950 mn for the expansion of the stationary stores network. Another PLN 150 mn will be invested in strengthening the logistics network and building a Distribution Centre in Brześć Kujawski, PLN 60 mn in the IT area and PLN 50 mn in further expansion of offices, including the Fashion Lab complex in Gdańsk. In total, the company’s investment outlays for 2021/22 will amount to PLN 1.2 bn.
Moreover, the Gdańsk-based company continues its development in the spirit of sustainability. The company joined the Canopy initiative in May to support the idea of sustainable use of forest resources both in terms of its packaging policy and the use of more environmentally friendly cellulose-based materials in its Eco Aware collections. It is a partnership that aims to better control the supply chain in this area. It is also part of the company’s plans to move away from single-use plastics and to find substitutes for them. The company has also taken action in terms of its new packaging policy by implementing a carton standardisation process. These are further steps bringing the Polish clothing manufacturer closer to achieving its strategic goal of reducing its carbon footprint by 15% from its Scope 1 and 2 operations by 2025.
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 collection in traditional stores already on 25 markets, including in such prestigious capitals as London, Berlin, Tel Aviv or Moscow. LPP SA manages five fashion brands: Reserved, Cropp, House, Mohito, and Sinsay. As at the end of 2020, the company had a chain of over 1800 stores with the total area of 1.4 million sq.m. The online offer of the brands collections is available on 30 markets. 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 nearly 22 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.