Poland’s largest fashion retailer, LPP, is implementing measures to cut costs and prioritize value brands. The company’s Chief Financial Officer, Przemyslaw Lutkiewicz, announced during a conference call that LPP will be reducing its marketing budget and reevaluating its logistics strategy. Lutkiewicz disclosed that previous attempts to raise prices were met with resistance from customers, particularly in value-for-money brands like Sinsay. Consequently, LPP is now aiming to reduce logistics spending by optimizing delivery times and costs through the utilization of Romania’s Constanta.

In addition to these cost-saving measures, LPP is placing significant emphasis on growth opportunities in southern and southeastern Europe while catering to the increasing demand for value ranges. The company has plans to open 380 new stores in the upcoming year, with approximately 150 of them located in southeastern Europe. Out of these new stores, 100 will be Sinsay stores. Lutkiewicz highlighted that as inflation continues to rise, more customers are gravitating towards more affordable brands like Sinsay.

LPP recently reported a 15% increase in full-year net profit, amounting to 1.10 billion zlotys ($264 million). The growth can be attributed to the opening of new stores and an increase in like-for-like sales.

The strategic focus of LPP on cost reduction and value brands aligns with current market trends, as consumers increasingly seek affordable options amidst economic uncertainty. By reallocating resources and capitalizing on growth opportunities, LPP aims to strengthen its position in the fashion retail industry. With plans to expand its presence in southeastern Europe and cater to the demand for value ranges, LPP is well-positioned to navigate the changing consumer landscape and thrive in the competitive fashion market.

Useful Links:
1. LPP Official Website
2. Apparel Market in Europe – Statista