Fashion forward

Empik Media & Fashion group, a leading premium brand retailer on the Polish market, generated zł.10.8 million in net profits in H1 2007 from sustained business activities - a growth of 700 percent on the same period last year. Sales revenues increased 33.6 percent, totaling zł.620.9 million. EBITDA was up 50 percent to zł.35.1 million.

The group's performance can be attributed to strong growth in the Polish retail sector, which rose 17 percent y-o-y in July. According to analysis from GUS, Poland's statistical bureau, the country's increasing economic strength, greater household incomes and increased consumer activity is driving the retail sales. Poles are spending more on premium goods, which include books, films, music, fashion, toys and entertainment.

With over 45 lifestyle brands and 326 retail outlets in its portfolio, EM&F group has a very strong presence in the segment in Poland.

The group expects growth of 15-20 percent for sales over the rest of the year - a modest figure given the strength of Q4 performance in the retail sector. EM&F's president Maciej Dyjas, is confident about the profitability of premium goods, remarking that "as disposable income increases and gives way to increased consumption, it provides a positive forecast for expanding our retail and language school network."

The group plans to spend some zł.100 million annually expanding its retail network  in Poland by up to 95 new outlets annually through 2009, strengthening its presence in Germany (Smyk) and Ukraine (Empik, Smyk, LSP) and boosting its e-commerce business.

EM&F will announce its strategy for bringing its Smyk and LSP business to Russia and Romania later this year. Its entry onto the Russian fashion market is contingent upon the acceptance of its acquisition of a majority stake in Russian fashion group Maratex by the Russian Competition Authority.