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LPP S.A. Press room The offer of LPP brands is already available on 39 markets

The offer of LPP brands is already available on 39 markets

20.11.2019

• Owing to the launch of the pan-European online store and the opening of brick-and-mortar stores in Finland, the company’s offer is now available on 39 markets.

• In 3Q 2019 LPP generated over PLN 2 bn in revenue, which means an increase by 15% y/y.

• In the first 9 months of this year, the Polish clothing manufacturer recorded over PLN 6 bn in revenue, which means an annual growth of 13%.

• Positive financial results in Q319 are due to, among others, double-digit y/y online sales growth and positive LFL ratios.

• Yet another quarter in a row, the foreign sales results of the Polish producer were higher than the domestic revenues.

Following the October debut in Finland and the launch of online sales on other European markets, the offer of LPP brands is now available on 39 markets. The brick-and-mortar stores of the Gdańsk-based company are now operating in 25 countries and the online offer covers 30 markets.

In line with the adopted strategy of multichannel sales development, LPP focuses on the qualitative development of the brick-and-mortar stores network and invests in e-commerce at the same time. – Omnichannel is our response to the current challenges in the retail industry and changing consumer expectations. In recent months, we have opened our first stores in Finland and extended the online reach of our brands by other European markets. With our offer, we have reached, among others, Italy, Austria and France, where despite the newcomer status we achieved promising sales results. Similarly as in the case of our brick-and-mortar network, we also see the increased importance of export in e-commerce. Already in the third quarter of this year, as much as 45% of sales in this segment was generated by online stores abroad – comments Przemysław Lutkiewicz, Vice-President of LPP for Finance.

In 3Q 2019, LPP generated over PLN 2 bn of revenue and PLN 140 mn of operating profit, recording an increase of 9% y/y. In the analysed period, the Group’s total revenues increased by 15% – thanks to the growing area of brick-and-mortar stores, high dynamics of online sales and positive LFL ratios.

– We are pleased with the start of the second half of the year. All our brands achieved good results despite sales period in July. As a result of the new merchandise management policy, we accelerated the stocking of our stores by one month. As a result, our customers could see the first proposals for the beginning of the autumn-winter season already in August. The new collections were much appreciated, which had an impact on generating positive sales results – explains Przemysław Lutkiewicz.

Summarising the first nine months of this year, LPP recorded over PLN 6 bn in revenue – 13% more than in the previous year. The company generated PLN 393 million of operating profit in that period, thus recording its growth by 22% per annum. Both in the third quarter and in the first nine months of this year, the company maintained the dynamics of total costs below the sales growth rate.

Export has been playing an increasingly important role in the structure of LPP revenues. Yet another quarter in a row, the foreign sales results of the Polish producer were higher than the domestic revenues. In the third quarter of this year, its value was positively influenced by the retail space growth, in particular in south-eastern Europe, and good reception of collections by customers in western Europe. In the analysed period, the area of brick-and-mortar stores of LPP increased by almost 13 % y/y.

Online sales in 3Q 2019 accounted for 11% of revenues from Poland and 10% of the Group’s sales. According to the plan, in 2019 the clothing manufacturer wants to exceed PLN 1 billion in e-commerce sales. The company intends to achieve this by, among other things, expanding its offer to new countries. This, in turn, also entails the need to develop logistics. In recent months, LPP opened a warehouse in Romania, dedicated to handling online orders. Thanks to the launch of Fulfillment Center with an area of 22 th m2, LPP is now able to do deliveries to customers from south-eastern Europe even the next day after the transaction. In 2020, the Gdańsk-based company plans to open another e-commerce warehouse, this time in Slovakia.

Due to the change introduced by the company in the method of calculating the financial year, 2019 will have 13 months, and the target financial year from 2020 will start on 1 February. The change aims to better match the way the company’s balance sheets are maintained on a quarterly basis with the collection life cycle, so that financial quarters fully reflect the fashion seasons. Therefore, the last quarter of 2019 will be accounted for as a 4-month period.

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LPP SA is a Polish family business and one of the fastest growing clothing companies in the region of Central and Eastern Europe. For over 25 years it has been successfully operating in Poland and abroad, offering its collection already on 25 markets, including in such prestigious capitals as London, Berlin, Tel Aviv or Moscow. LPP manages five fashion brands: Reserved, Cropp, House, Mohito, and Sinsay. The company has a chain of over 1700 stores with the total area of over 1 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 200 million pieces of clothing to three continents. LPP plays another important role as it employs over 25 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.