Polish garment manufacturer LPP’s sales plummet and it reduces store leasing
In the first three weeks of May, the physical store sales of Polish garment manufacturer LPP fell by more than 80%. The company expects that by the end of the 2020/21 financial year, sales will not decline by more than 30%, reaching PLN 9.9 billion, and sales profit margins will also shrink.
At the same time, the lease contract the company is negotiating may still take 2 months to finalize. In April, LPP, which owns House, Sinsay, Reserved and other brands, terminated 30% of its retail store leases. So far, the LPP has reached only 10% agreement and only 1/3 of the leases have been renegotiated.
Due to the impact of the new coronavirus epidemic, customers’ attitudes towards shopping malls and shopping behaviors have changed. Therefore, LPP companies want to link rents to turnover. The company’s management is considering not opening all stores and only wants to develop the strongest brand. In addition, salaries also constitute high costs, so LPP companies tend to cut them by an average of 20%. The company’s Board of Directors and Supervisors decided in April to forgo salary for at least three months. LPP is also applying for government support in Poland and abroad.
AAA Composite Fabric Network VBBCNVM, N. KJO
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