Reserved owner upbeat as it prepares for UK, Italian and Greek expansion
LPP, the Polish company that owns the Reserved and Sinsay brands, among others, said Q2 revenues (the three months to July) rose 45% year on year on a like-for-like basis. It saw 19% actual growth, topping PLN4.3 billion (€0.88bn/£0.77bn/$0.85bn).
This came as it gears up for further expansion in Italy, Greece and the UK.
The strong results came as the Sinsay brand saw fast growth with a revenue rise of 63% as it expanded in new e-commerce markets of Greece, Spain and Italy.
That helped it to online revenues of PLN1.2 billion and growth of 54%.
Overall, the business said that “consistent development on European markets brought LPP another quarter in a row [of] higher sales results from abroad, which in the second quarter accounted for 57% [of] group revenues”.
International expansion is a clear aim for the business and it said that Western Europe is its key target. Reserved’s debut in Milan is planned for 2023, and it’s working on brand expansion in London, expecting to open stores in three shopping centres. Sinsay is also being taken to new countries not just via e-commerce, but via physical stores with Italy due by year-end and Greece early next year.
The company was upbeat about its performance in the quarter, “despite the changes related to the war on the eastern border”. It saw revenues leaping even after its withdrawal from the Russian market and given “the limited security of business operations in Ukraine, where 96 out of 159 LPP brand stores are currently operating”.
The impact of the Russian exit can be seen from the figures mentioned earlier where revenues growth was 19% but would have been 45% with the Russian market factored out of the previous year’s numbers.
Even the lower figure is clearly impressive, although the gross margin dipped to 52%. But net profit for the first half as a whole topped PLN514 million, up from PLN480 million in H1 last year.
It said this was due to “the consistent implementation of the goals that the Polish manufacturer has chosen in the new development strategy for foreign markets and, at the same time, confirmation of the rightness of the decisions made in this area”.
The company said: “In such difficult market conditions, this is a very good result and confirms the positive reception of our collections in other countries. In all markets, customers eagerly shopped both in the [physical stores] network and online. Despite the growing inflationary pressure, we are currently not seeing any slowdown in customer purchasing trends. This is largely the result of the interest in the autumn wardrobe exchange and the back-to-school offer.”
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