Reserved owner LPP's sales and profits soar as it expands abroad

By

Sandra Halliday

Published
Mar 14, 2018

“2017 was undoubtedly the best year in the company’s history.” That was how LPP started its annual report on Wednesday and there’s no denying that the owner of the Reserved, Cropp, House, Sinsay and Mohito chains is riding high at present.

The company said “the market success of our five brands was reflected in a higher than average level of turnover, never seen before in the 27-year history of LPP.”

It saw a 17% revenues rise to PLN7 billion (€1.656 billion), or a 10% rise on a comparable basis, while net profit was 150% higher at PLN441 million (€103 million). Online sales meanwhile grew 108% to PLN 361 million (€86 million).

A major feature of the year was the debut of the flagship Reserved brand in “the demanding British market,” as well as its debut in Serbia and Belarus (coincidentally at the same time as rival Inditex launched Zara in Belarus).

While the UK market is still in its early days, for 2017, revenues there accounted for 0.2% of its total turnover. Meanwhile German sales rose strongly and now make up 3.7% of the total (up from 3.2% a year ago) after the opening of the Reserved stores in Hamburg and Cologne – its 17th and 18th stores in the German market.

And Russia accounted for almost 18% of its sales with turnover in that market rising steadily. But the Polish market still accounts for more than half of its sales at 55.6%, even though that share is falling as it expands abroad.

LPP now has 1,743 stores in 20 countries in Europe and the Middle East and is planning further expansion with debuts in Kazakhstan and Slovenia ahead, as well as opening franchise stores in Israel under a new deal for that country. 

As well as physical store success, LPP also saw 2017 as a “breakthrough year" due to the expansion of its e-tail ops, which more than doubled in the 12-month period. Last year it targeted the Baltics and launched online stores for all five of its brands in Lithuania, Latvia and Estonia. That means its brands currently operate online in 11 European markets and in 2018, it plans to expand to five more countries. 

But while last year was mainly about developing the public-facing element of its store-to-webstore ops, a big focus was also logistics and IT as it worked to ensure that its growth could be supported properly. It has been opening new distribution centres, including one in Poland and another near Moscow in Russia, which it sees as a key market.