Reserved plans fast growth as owner sees turnover rise
Poland’s LPP appears to have scored a hit with the UK debut of its Reserved chain in the former BHS flagship at Oxford Circus, London. The company said that it sees between 4,000 and 5,00 visitor daily with the number hitting 6,500 on Saturdays.
And the business is also focused on e-sales with plans to expand its e-tail fulfilment beyond its current facility in Poland. It will open a UK centre as well as another European one.
The company’s CFO, Przemysław Lutkiewicz, said that its investment in its e-tail operation “has paid off” and it expects further growth, particularly for the Reserved brand in Britain. Group e-tail sales at LPP rose 114% in Q3, helped by the Reserved UK debut.
The news came as LPP reported that its swung to a net profit in Q3, reporting income of PLN85.1 million compared to a loss of PLN6.5 million a year ago. In the three months to the end of September, Reserved’s revenue those 25% to PLN825 million.
With Reserved playing the same kind of starring role in LPP’s portfolio as Zara does in Inditex’s, its growth outstripped most of the rest of the group. Not that the remaining operations were weak. Total revenue for the group, which also includes the Cropp, Mohito, House and Sinsay brands, rose 21.8% to PLN1.81 billion and group comparable sales rose 15.2%.
While the company’s other brands are smaller than Reserved, they are growing and its smallest label, Sinsay, saw almost 31% growth in the latest period.
And the firm is targeting further double-digit expansion next year, although the recent decision in its domestic market to ban Sunday trading could affect this, as could exchange rates issues.
But overall, the company is a buoyant one and this has helped its share price rise fast in the past 12 months with the business now valued at a total of PLN15 billion.
At the end of September, the company operated almost 1,700 stores in 20 countries with both Reserved and Sinsay seeing the fastest space expansion during Q3.
The company invested PLN120.3 million in new space during the three-month period with a huge chunk of that dedicated to the London opening. Over the next year, investment spend is set to increase by 5% with stores planned for Kazakhstan and Slovenia (owned) and Israel (franchised). Total space growth should be 10% with Reserved to be in 23 countries by the end of next year.
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