By Marta Maciag, Julia Kotowska
GDANSK (Reuters) -Poland’s largest fashion retailer LPP is betting on rapid expansion of its budget brand Sinsay to double its annual revenue to 40 billion zlotys ($10.56 billion) by 2027.
Under the new three-year strategy, Sinsay is set to account for 75% of the group’s total sales, LPP said on Thursday.
It aims to expand its store network to around 7,500 outlets by the end of 2027, with Sinsay stores making up about 6,000 of those, and to increase e-commerce sales to 10 billion zlotys in the same period.
Sinsay’s business model is centred around expansion into smaller towns, providing budget-friendly fashion in areas with lower retail competition.
LPP opened 572 new stores last year, 534 of which were for Sinsay, which aims to compete with fast fashion retailers like Inditex’s Bershka.
However, mBank analyst Janusz Pieta raised some doubts over the planned network expansion, which also included some 1,600 added stores in 2025.
“The store openings target for 2024/25 may be too ambitious, and we see a risk that not all planned stores will open,” Pieta said in a note to investors.
LPP’s shares fell 9% by 1143 GMT, on track for their biggest one-day drop since March 15, 2024, when short seller Hindenburg Research questioned the 2022 sale of its Russian assets.
LPP has no plans to return to the Russian market, CEO Marek Piechocki said during a press conference, adding the group was focused on expanding in Poland and Eastern, Central and Southern Europe.
Asked about the impact of U.S. tariffs on global trade, Piechocki said they could create opportunities for better pricing from LPP’s Asian suppliers.
“Companies from Asia will be under greater pressure to sell cheaper to European companies or to us. So it will be to our advantage — they will have to lower prices,” he said.
LPP operates mostly in Central Europe and has no trade in the United States.
($1 = 3.8189 zlotys)
(Reporting by Marta Maciag and Julia Kotowska, additional reporting by Rafal Wojciech Nowak, editing by Milla Nissi)
