Enterprise Investors invests in LPP, the dominant fashion retailer in Poland
Warsaw, 6 May 2003 — Active since 1995, LPP has become the dominant player in the Polish fashion retail market via Reserved, its leading and well-recognized brand aimed at young people. The company designs and sells clothing through a retail network of 54 stores in Warsaw, Moscow, Budapest, Prague and other major cities in the region of Central and Eastern Europe. The retail concept is based on providing a wide variety of fashionable clothing at prices suited to the CEE target consumer, in much same way as H&M and Zara succeed in their own home markets.
LPP SA has been traded on the Warsaw Stock Exchange since May 2001, and is a high-growth company that is attractive to investors. Rapid, systematic expansion allowed LPP to achieve total revenues of PLN 261.6 million (over $65 million) and net profit of almost PLN 19 million ($4.75 million) in 2002. The 1Q 2003 sales results exceeded PLN 75 million ($4.25 million), 49% up on the same period in 2002. The company raised PLN 50 million ($13.3 million) of new equity to continue its successful expansion by doubling the number of stores within two years.
Analysts estimate that the Polish clothing market generates sales of approximately $3.5-4 billion annually. The market is fragmented, with very few chains numbering more than five to ten stores. Reserved is by far the largest fashion retail chain in Poland.
“We are very pleased to become an investor in such a dynamically growing company, which has clear potential to become a regional leader in its market. With our extensive retail experience, we should be able to help management develop the company further,” commented Jacek Siwicki, managing partner of Enterprise Investors.
Enterprise Investors has been active since 1990. Funds managed by Enterprise Investors have invested over $650 million in almost 90 companies across all economic sectors in Poland and Central and Eastern Europe.
EI is an active private equity investor in the Polish retail sector. The firm’s funds have backed a number of successful retail companies, including W.Kruk and Eldorado, both now traded on the WSE, as well as Deni Cler, now part of the W.Kruk holding.