For People, For our planet

TOWARD
SUSTAINABLE
FASHION

0t

CO2 E / MILLION PLN
EMISSIONS FROM SCOPE
1 AND 2 PER REVENUE

0%

OF ALL 2021 RESERVED
COLLECTIONS ARE
ECO AWARE

Sustainable Development

We can proudly declare 2021 a successful year for LPP, despite the pandemics, broken supply chains and difficulties in sourcing raw materials for materials. However, no one expected that with 2022 much more difficult events would await us, which would change the reality as we know it. Today, the reputation of a good and strong company is no longer granted only to those that place emphasis solely on financial results. A forward-looking company is one that is aware of climate, social and corporate governance challenges. It can respond to them with a clear plan of action. This is the result of the ongoing evolution of the market, in which three letters - ESG - have come to the fore. Today the world evaluates companies from the perspective of values.

Marek Piechocki,
President of the management board LPP

Our commitments

Find out how we are moving towards sustainable fashion. Read about our commitments, included in the 2020-2025 Sustainable Development Strategy, entitled ‘For People For Our Planet’.

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Our rules

Over the years we have developed principles that unite us - such as responsibility, honesty, fairness, openness and respect for others, as people are our highest value.

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Environment

A responsible climate policy is an integral part of our strategy. Find out about our environmental activities and their impact.

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People

We are united by principles such as responsibility, openness and respect for others. Read how they affect our relationships with employees, suppliers and local communities.

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LPP’s Contribution to
the economy – taxes

We are a major employer, a business partner to hundreds of companies and a tax payer. Find out how much we contribute to the economy and where we pay taxes.

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Reports

Reports

Here you will find our latest report and all previous ones. Check out LPP’s progress, find out detailed environmental, social and business results.

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Q&A

We share with you the answers to the questions we are most frequently asked. We try to explain clearly what our business is all about. We believe that by doing so, you will get to know us better.

The bulk of our collections are manufactured abroad. Our Asian contractors are commissioned to manufacture models designed many weeks ahead of a collection’s launch – usually clothes that are available in all our stores and ordered in the largest quantities. In Asia, we collaborate with suppliers in locations such as China, Bangladesh, India and Vietnam.

In Europe, our network includes suppliers from Poland, Italy, Portugal and Turkey. In our country and on our continent, we primarily order models inspired by the latest fashion trends, where quick delivery to the customer is of the essence.

• Almost 9% of our brands’ collections are produced in Poland or its close environs.
• 22% are Reserved commissions.
• 34% are Mohito models.

Poland-based production enables us to promptly respond to rapidly changing trends. We are able to deliver the desired outfits and accessories to our stores in a dynamic, timely and demand-sensitive manner, because the most complex, fashionable and time-consuming models are manufactured in close proximity to where they are sold. This helps reduce logistical delays by anywhere from 2 to 6 months.

Just like our global competitors, we don’t have our own production plants. Instead, we outsource the manufacturing of our collections to external companies active in Poland and across Europe and Asia.

This business models allows our purchasing agents to base the production of individual models in factories that specialize in a specific type of clothing.

The LPP is a Polish company and works to support the Polish economy. Our brand concepts are born in Poland and this is where all our strategic decisions are made. Accordingly, we also pay our taxes here in Poland. Over the past five years, our contributions have increased the state budget by more than 4,3 bn PLN.

In the 2018 report of the Ministry of Finance, the LPP was ranked as the 30th largest CIT payer in the country, with a total contribution of more than 144 million PLN; this also made us the top third company in the trade sector. A year later, we contributed a record amount of more than 1 billion PLN to the state budget, including 134 million in CIT alone. In 2020, our contribution to the budget equalled 700 mln PLN.

The unprecedented crisis brought on by the Covid-19 pandemic has dealt a painful blow to the clothing industry all over the world. Our company has also been hard-hit by the pandemic. Having to shut down almost all our bricks-and-mortar stores overnight stripped us of our main source of revenue.

From the very start, our priority has been to ensure the safety of our employees, customers and partners, preserve as many jobs as possible and maintain financial liquidity. We lost no time in taking a number of measures to cut back costs, e.g. we cut our investment expenses down to the bare minimum, reduced the number of orders for the coming season, limited the openings of new stores, and the management and the supervisory board gave up their salaries.

However, these measures proved insufficient to guarantee that the company would survive into the future. This is why, following in-depth analyses, we were compelled to expedite the changes in our business model, putting a much greater emphasis on e-commerce and shifting our customer service strategy toward omnichannel sales.

Regrettably, this entailed a change in our employment structure. This decision was the most difficult to take, but also necessary to protect our company, ensure its continuity and, in the long run, enable it to grow and maintain a strong position in the market.

The CEO of LPP is directly responsible for setting courses of action and climate targets, approving projects and initiatives to reduce greenhouse gas emissions and defining the work of the ESG department. Risk assessment, including ESG risks, in particular those related to climate, is under the responsibility of the Vice President of the LPP Board.

In addition, board members participate in regular briefings on ESG and sustainability issues, prepared on behalf of LPP by expert external entities. Board representatives are also actively involved in the development of the ESG management approach.
The supervisory board receives regular and comprehensive information from the management board on the company’s ESG-related activities and can issue an opinion on them.

Seeing the enormity of the challenges that still lie ahead in the implementation of the sustainability strategy and the implementation of the ESG model, in December 2021 the LPP Board created the position of Director of Procurement and ESG. His/her responsibilities include planning and coordinating the implementation of responsible business standards in the LPP Group, developing and implementing guidelines in all three ESG pillars: environmental, social and corporate governance.

The Director of Procurement and ESG reports directly to the CEO of LPP. Supporting the Board and the Director of Procurement and ESG in defining ESG objectives and policies is the ESG Committee, which includes, for example, the directors of our company’s key business units.

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