Polish fashion retailer LPP can beat annual targets amid e-commerce challenge, CFO says

Polish fashion retailer LPP expects to meet or exceed its financial targets this year, its finance chief told Reuters, saying the expansion of Chinese e-commerce platforms into Europe had yet to significantly dent its business.
The upbeat expectations are supported by better cost management, notably through the robotization of its logistics centres and the implementation of AI, which yielded higher savings than ⁠expected, Chief Financial Officer Marcin Bojko said.

“The second half of the year, in particular, gives us many indications for (the outlook’s) improvement over ⁠the current assumptions, especially regarding profitability indicators,” he said ahead of the scheduled publication of LPP’s third-quarter results next Thursday. The group, based in the port city of Gdansk, has guided for annual revenue of ‍at least ‌23 billion zlotys ($6.4 billion).

It plans to invest about 3.5 billion zlotys this year, ⁠2.3 billion of which is ‌reserved for new store openings, as it pursues aggressive expansion of ‌budget brand Sinsay to challenge low-cost rivals, including Chinese fast-fashion platforms Shein and Temu.

LPP is counting on faster delivery through local logistics centres, physical stores where customers can experience products first hand, and full compliance with EU regulations in ‍its battle against Chinese e-commerce players. “We still have plenty of advantages over our Asian competition,” Bojko said.

Unlike pure-play online platforms, LPP operates an omnichannel model that combines e-commerce ‌with physical ⁠retail ​stores and automated logistics infrastructure. LPP’s largest logistics facility, located in Bydgoszcz ⁠in northern ​Poland, cut around 25% of its operational costs through the use of robotisation, which has helped it keep pricing competitive while offering faster delivery than Chinese rivals, ​the CFO said.

LPP is using virtual models and AI-generated backgrounds for Sinsay campaigns, eliminating the need for expensive location shoots. ⁠This will lead to savings of 1 ⁠million zlotys in its roll-out year alone, Bojko said. “There is no turning back from implementing AI solutions, especially in a business of our format,” he said.