“We’ve seen the retail sector in emerging Europe advance rapidly since LPP was established at the end of the communist era,” Marek Piechocki, LPP’s president tells Emerging Europe. “Besides Poland, our top markets are currently Russia, the Czech Republic and Ukraine, and we’ve seen strong development across both CEE and the CIS in general. We’re confident this will continue and that our brands will gain recognition and market share across the region – beginning with the latest expansion into Serbia, Slovenia and our debut next year in Bosnia and Herzegovina.”
The LPP Group is one of Poland’s biggest clothing chains. The Reserved brand makes up 50 per cent of the group’s revenues. Considering the current high street retail market globally – which seems to be struggling – LPP’s Mr Piechocki does not seem phased by the fact that their competitors seem to be dialling back their investments.
“We recognise that the retail landscape is changing rapidly, and that this presents challenges,” he says. “However, our business strategy is based on our own experience of the markets we operate in, not what our competitors are doing. Having seen eleven quarters of consecutive growth, we are confident that our current approach is working. LPP has global ambitions and in order to see these become reality we must make strategic investments – such as our new 400 million zloty logistics centre and upcoming entry into Kazakhstan, Finland and Bosnia and Herzegovina.”
Over the summer, LPP opened its first Reserved store in Israel, an opening which was such a success that the store had to close its doors early as the shelves were left bare.
“In 2018, apart from our debuts in Israel and Slovenia, we will be expanding into Kazakhstan, and strengthening our presence in Germany. Next year, we will open our first stores in Finland and Bosnia and Herzegovina, and by the end of 2019 we aim to have a physical presence in 25 countries, and an e-commerce presence in 35 countries. Our expansion into new markets is an ongoing process, and we will only settle for exactly the right location and situation,” notes Mr Piechocki.
Earlier this year, LPP as a group moved all the assets of the company into a trust, as the owners of the company want it to remain a Polish company.
“LPP is a family company and runs on family values. It was logical for us to reflect that in the structure and operations of the company. Putting the company into a trust was the only way to guard against the risk of selling or fragmenting its capital in the future. For me, it felt like my responsibility to secure the future of the company for its employees,” added Mr Piechocki.
In addition, Mr Piechocki confirms that all the company’s clothing designs are created in-house, thus preserving the company’s Polish origins, based between their head office in Gdansk and design offices in Warsaw and Krakow.
“It’s important that the designers know and understand their brands and product section, in order to produce the best possible garments that their customers will want to buy. Another reason for keeping design in-house is that we believe our unique eastern European aesthetic differentiates us from competitors. So, while we employ designers from across the globe, and encourage them to travel and gain inspiration, our designs also have to reflect something of who we are as a company,” says Mr Piechocki.
Whilst most people living in CEE have heard or even shopped at some of the group’s other brands such as Cropp, House, Mohito and Sinsay, most people outside of the region are familiar only with Reserved. As Mr Piechocki points out, the other brands in the portfolio are much younger, having been established several years after Reserved, which appeared in 1998.
“Cropp was established in 2004, House and Mohito were acquired in 2008, and Sinsay debuted in 2013. They are considerably younger as brands, and also have more targeted audiences, meaning they currently make up a smaller percentage of sales than Reserved.”
However, LPP has ambitious plans for its youngest brand.
“We aim for Sinsay to be the second biggest brand in our portfolio in terms of global retail space by the end of 2019, just behind Reserved,” concludes Mr Piechocki.