LPP in expansive mood

Plans for expansion

“Our strategy is to increase the number of stores in our chains by 10 pct a year. In 2018 we will open Reserved stores in Israel and Slovenia. We are also going to modernise the Reserved store in the Arkadia shopping centre, which is to be extended to 2,800 sqm,” revealed Marek Piechocki, the CEO of LPP, at a recent conference held by LPP in Gdańsk entitled ‘1 Store = PLN 15 mln for the Polish Economy’. This year LPP had a budget of PLN 0.35 bln for investment in the construction and modernisation of its stores. “LPP will have added 61,000 sqm of retail space in 60 locations for all our brands by the end of this year,” said Dorota Patej, the head of LPP’s investment department. According to the company, each store it opens creates around 300 jobs. In 2016, 3,500 people worked on the group’s new investment projects. These included people from 300 outsourcing companies, along with 100 construction teams from six general contractors as well as 50 furnishing teams from six fit-out firms. The value of LPP’s exports came to PLN 3 bln over the period. In 2016 the company negotiated the construction, relocation and renovation of its stores in 176 shopping centres and signed 500 contracts and annexes. “Each newly-opened store adds PLN 15 mln to the Polish economy, as this comprises all of our expenses,” declared Marek Piechocki. The CEO also added that LPP’s foreign stores are designed in Poland – as well as their furnishings. For the London Reserved store (3,000 sqm on Oxford Street), the furnishings had to be transported by ten lorries to the site. The London opening required an outlay of GBP 4.7 mln (app. PLN 22 mln). “Even our foreign stores abroad are ‘made in Poland’. We work with Polish businesses during their construction and only the water, electricity and the air comes from the location. I am proud to say that LPP is a Polish company,” remarked Marek Piechocki.

Designing stores

For many years LPP has worked with Studio 1:1, which is responsible for as many as six of the interior design formats used by the Reserved chain. The latest is known as ‘open to public’ and has been used for the store in London as well as in the Morena mall in Gdańsk and the Złote Tarasy shopping centre in Warsaw. “The ‘open to the public’ format is a modern, minimalist interior, without any superfluous decoration. The customer sees the store’s goods before entering as a result of the arrangement of the window display, as well as the bright furnishings and LED lighting with its brightness and colour movement controlled by a DALI system for creating lighting scenarios,” explains Beata Szymańska, the founder and owner of Studio 1:1. The new concept has no space for high shelves or hangers in the corners – everything is at eye level and within the customer’s reach. The London store also features a number of modern systems, such as a vacancy indicator for the changing rooms to make shopping easier, modern smoke detectors for improved fire safety as well as sensors that track customer movement and assesses their age and gender. LPP is investing a great deal in improving the shopping experience as well as in developing its technology and different sales channels. In LPP’s design department, a team of 40 designers and coordinators work on the creation of new sales systems for each chain of the company. On average, the team creates and tests around 100 such experimental systems per year, at a cost of app. PLN 10 mln. In addition, the development of the different sales channels, particularly online sales, is supported by 250 programmers, which cost LPP PLN 60 mln in 2017. “We want to be employing around 2,000 people on various research and development projects by the end of 2018. This is the creative energy that constantly drives on the development of LPP and our flagship brand Reserved as well as contributing to the growth of the entire Polish economy,” claimed Marek Piechocki.

LPP and the numbers

For Q2 2017 LPP recorded revenue of PLN 1.7 bln with a net profit of PLN 173.3 mln. Its total retail area grew by 7 pct to 933,700 sqm over the period and the number of its stores to 1,710. It now has physical stores in 20 countries but operates online in 45. It has plans to enter Bulgaria, Croatia, Serbia and Slovenia in 2018. And due to the rapid growth in its online sales, LPP is planning to open a distribution centre in Stryków and is also thinking about warehouses near motorways in the Warsaw and Gdańsk areas.