LPP Cuts Plans for Sinsay Stores Abroad Amid Slowdown

Polish fashion group LPP is scaling back its ambitious expansion plans, particularly for its fast-growing Sinsay brand, due to a combination of factors including fewer new store openings and logistical challenges. The company announced a revision to its revenue forecasts for the 2026 and 2027 financial years.

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Slightly lower revenues, better gross margin on sales, unchanged EBITDA and net profit. This is the effect of revising assumptions regarding new store openings by the LPP group this year.

Marcin Bójko, LPP's vice president responsible for finance, explained that the revenue forecast for the current year has been reduced from 28-29 billion Polish złoty to 26-27 billion złoty. This adjustment is attributed to three main reasons: a decrease in new store openings, less optimistic sales projections for existing stores, and ongoing logistical problems stemming from a warehouse fire in Romania last year.

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After the fire, we have challenges both in Poland and in the region.

The most significant cutback is in the number of new Sinsay stores planned internationally. LPP now aims to open 750 Sinsay stores abroad in the current year, down from an initial plan of 950. The plan for the next year has also been reduced to 750 stores, from a previous target of 1,000.

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We will slow down development a bit and focus on the best stores.

Bójko specified that the slowdown primarily affects international markets. For instance, Ukraine, now LPP's second-largest market, presents challenges due to the ongoing conflict, necessitating a more selective approach to store locations. Similar cautiousness is being applied in Central Asia, where increased costs due to wartime activities impact product delivery. LPP also noted economic slowdowns in Romania, the Czech Republic, and Slovakia, and indicated a need to improve its offering for the Italian market.

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It's time to hit the brakes harder.