LPP sees profit leap

Gdańsk-based LPP, owner of clothing brands Reserved and Cropp Town, boosted its Q1 net profit by 59 percent y/y to zł.18.1 million, while sales rose by 28 percent to zł.339.7 million.

"I found these results very good, as usually Q1 is the weakest period of the year in the clothing sector," said Magda Jagodzińska, a branch analyst at Erste Securities Polska. "And the company had strong results in Q1 2007, so 59-percent growth is really high," she told WBJ.

The company intends to increase the number of its outlets this year and construct a "freight village."

"This year, our investments will reach zł.200 million, and around zł.100 million will be spent on the freight village," said Dariusz Pachla, the president of the company. By the end of 2008, LPP should have opened 36 new Reserved stores, and 39 Cropp Town stores. The firm currently owns 182 Reserved stores and 134 Cropp Town stores. "There is a chance that this year will bring with it another 30,000 sqm [of store space]," said Pachla.

The company also plans to make a number of acquisitions. It has already agreed on the takeover of  Artman, the owner of the House clothing brand. By the end of May, LPP will call for a 100-percent stake in Artman, on which it plans to spend nearly zł.395 million. LPP is also negotiating with other Polish and foreign firms. Company officials said one or more acquisitions could be completed by the end of 2008, but refused to give details.