LPP sees strong Q1, Reserved and Sinsay owner predicts more of the same

LPP, the Polish fashion retail giant that owns Reserved and Sinsay, has released its Q1 results. And the company hailed a “very good” three months that generated over PLN4.3 billion (€982m/£826m/$1bn) in revenue, double-digit sales growth and “record operating profit”.

It said the positive reception to its spring collections by customers led to that undeniably impressive revenue figure, which represented a sales increase of 18.3% year on year. The strong collections meant it was able to sell more at full price.

Meanwhile, with a gross margin of 52% (up 2.5ppts), operating profit rose 78% to PLN411 million. 

The profit was also helped by factors outside of its control as it benefited from favourable exchange rates.

And the company added that despite wider downward market trends in online sales, the beginning of the financial year saw it with a “significant improvement” in e-sales, a statement that seems fully justified given that such rose over 23%.

Meanwhile the company — which operates the Cropp and Mohito brands as well as Reserved and Sinsay —  also saw double-digit revenue growth via its retail stores.

And the group expects more of the same as it focuses on expanding in the markets of Central and Southern Europe, although it has also been expanding in the UK via its flagship Reserved brand. In fact it has been ramping up its UK opening plans after a slow start and as recently as late May it opened its fifth Reserved store in Britain. That was a debut at the giant Westfield London mall, along with a major marketing campaign and special collection.

Przemysław Lutkiewicz, vice-president of the management board, said the company has ambitious targets of 20%+ sales growth for this year and has “strong grounds” to believe it will achieve that. 

That confidence is perhaps unsurprising given how it seems to have shaken off the tough environment at the start of the year and as it has plans to expand its store network by over 700 new locations annually, as well as further strengthening the e-commerce channel, and maximising the potential of mobile sales.