The results of LPP SA for the first quarter of 2016
LPP, a company managing six clothing brands – RESERVED, Tallinder, Cropp, House, MOHITO and SiNSAY, in the first quarter of 2016 increased the surface area of its stores by more than 14 percent year on year. In late March, the clothing of the brands belonging to LPP was available in 18 countries in Europe and Middle East. The revenue in the reported period amounted to nearly PLN 1.2 billion, which means an increase by over 17 percent year on year. The company also reported a 52% growth in online sales.
In the first three months of this year, the value of the sales revenue amounted to nearly PLN 1.2 billion and increased by over 17 percent year on year. In the reported period, the company opened new stores with a total surface area of 11.5 thousand sqm, thus increasing the retail space to 855 thousand sqm. Gross margin amounted to slightly more than 46%, net loss – PLN 66 million, and revenues from the sales in comparable stores increased by over 4 percent as compared to the first quarter of 2015. In the RESERVED stores, the sales value amounted to PLN 538 million, and in the Cropp ones – PLN 167 million. The value of sales in the first quarter in the MOHITO stores was PLN 150 million, in the House stores – PLN 144 million, and in the SiNSAY ones – PLN 88 million. The new LPP brand – Tallinder – recorded the sales of PLN 1 million.
The company’s results in the first quarter were mostly influenced by external factors – mainly the pressure of competition in the Polish market, as well as warm winter and Easter holidays falling in March this year. Still, the value of a dollar – the currency in which we settle the payments with the majority of our suppliers – is a significant burden for our business– says Przemysław Lutkiewicz, Vice President and CFO of LPP. At the same time, we see the improvement in the areas that directly depend on us – step by step, we are improving sales, especially abroad, the share of online sales is growing rapidly, and the income of our flagship brand – Reserved – on the development of which we are currently focusing, is also increasing. The first outcomes of our actions are already noticeable in the results for April– he adds.
Last month, LPP Group sold clothing worth PLN 472 million – the revenue, as compared to April of last year, has increased by 23 percent, while the retail surface area of LPP Group has grown during the year by 14 percent. Special attention should also be paid to the dynamic growth of the share of the e-commerce channel in the Group’s sales. In the first quarter of last year, the company sold online products of the value exceeding the sales in the same period last year by over 52 percent. LPP consistently invests in the
e-commerce base – in the year, the employment in the area has doubled – now about 80 people are employed in that area.
This year, the company is planning to increase its shops retail space by 10 percent. – The adjustment of the plan is primarily due to a slight slowdown in the Middle East, resulting form the current geopolitical situation. The total value of all LPP investments will amount to approx. PLN 390 million. Capex, slightly lower than in the previous years, is largely due to the opening of franchise stores in the Middle East, as well as greater use of the so-called fit-outs, i.e. subsidies of shopping centres to the construction of stores, which are a serious cost relief for the company.
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LPP SA, a company listed on the Warsaw Stock Exchange since 2001, is one of the fastest growing clothing companies in the region of Central and Eastern Europe. For over 20 years, the company has consistently carried out its operations in Poland and abroad, being successful on the demanding clothing market. LPP SA manages 5 popular fashion brands: RESERVED, Cropp, House, MOHITO and SiNSAY, and at the beginning of 2016 the company introduced its first premium brand – Tallinder. The company has a network of over 1,600 stores and creates jobs for 20 thousand people in its offices and sales structures in Poland, Europe, Asia and Africa. LPP SA invests and acquires new markets. In 2015, the company opened e.g. its first stores in the Middle East. In 2014, the company advanced to the stock exchange index WIG20, which generates a significant part of the turnover on the Warsaw Stock Exchange and belongs to the prestigious MSCI Poland.
Contact for the media:
Marta Chlewicka
LPP Press Spokesperson
media@lpp.com