Polish fashion retailer LPP to expand its retail space

WARSAW, Aug 1 (Reuters) - Poland's top fashion retailer LPP wants to expand its retail space by an annual 10 percent between 2018-2020 and aims to open stores in Israel, Slovenia and Kazakhstan this year, Chief Financial Officer Przemyslaw Lutkiewicz told Reuters.

Chief Financial Officer Przemyslaw Lutkiewicz said on Thursday that the retailer's previous attempts to raise prices were met with resistance from its customers, especially in value-for-money brands like Sinsay.

Lutkiewicz upheld LPP's gross margin goal at 54-55 percent for 2018 and said he expected a similar figure for 2019.

He expected like-for-like sales growth in the third quarter to be similar to the 14.6 percent posted in the second quarter.

The fashion company upheld its guidance for revenue growth, aided by an increase in commercial space, steady online sales and positive like-for-like sales, which increased 17% on the year, with all of the group's brands reporting double-digit rises.

The owner of brands such as Reserved, Sinsay and Mohito had raised product prices due to higher costs caused by inflation. According to the flash reading, the inflation in LPP's home market, Poland, rose 17.4% year-on-year in November.

Earnings before interest and taxes (EBIT) rose to 1.46 billion zlotys from 1.13 billion zlotys the previous year and the company will recommend a full-year dividend of 430 zlotys per share.



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Its brands, which include Cropp, House, Mohito and Sinsay are already present in 19 countries but the firm has yet to make its mark in the UK.

To beef up its debut Reserved has roped in Kate Moss as the face of its collection.




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"The company is going through the toughest moment for consumer in very good, quality style," Trigon analyst, Grzegorz Kujawski told Reuters, praising retailer's outlook for upcoming quarters and adding that analysts will now be reviewing their recommendations for retailer.

LPP's full-year gross sales margin dropped to 51.1% in the year to end-January from 57.2% in the previous 12 months, dragged down by restricted sales ability in high margin markets Russia and Ukraine, while the cost-to-sales ratio stood at 42.1%.

GDANSK, April 27 (Reuters) - Poland's biggest fashion retailer LPP is slashing its marketing budget and rethinking logistics as part of an ongoing drive to cut costs, chief financial officer Przemyslaw Lutkiewicz said during conference call on Thursday.




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