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Why Reserved is putting LPP in Pole position

As Polish label Reserved launches in the UK, Drapers visits its headquarters in Gdańsk to find out more about the latest fast fashion contender to hit British shores.

Marek Piechocki is extremely camera-shy. The chief executive and co-founder of European clothing conglomerate LPP happily invites questions while hosting a presentation in Polish port city Gdańsk, but requests that no photos of him are taken.

“It’s not that I have anything to hide,” explains Piechocki. However, he usually avoids making public appearances: “It’s important to live a normal life. This way, no one will point fingers and say, ‘That’s the guy who has that big company.’”

It is hard to align this low-key mentality with LPP’s flagship fast fashion brand Reserved, which has marched into the limelight with its UK launch. Its multi-million pound campaign featuring Kate Moss, which kicked off last week, is plastered all over public transport in central London.

It has also begun an educational partnership with the London College of Fashion, which involves an exchange programme and event sponsorship.

To maximise its visibility, Reserved is opening its 2,300 sq ft Oxford Street flagship on the site of the former BHS this week.  with a wide storefront offering views deep into the store. At the same time, it will launch its UK website, and a menswear and womenswear capsule collection called Re.Design.

The team unveiled the capsule range, and its full autumn 17 collections, at a vast shipyard in Gdańsk. Head of marketing Monika Kapłan describes the brand as “80% polished” – sharp and refined – and “20% unpolished” – a “bit tasteless and ugly”.

Reserved is split into three ranges: fashion line, which is its largest; young fashion line; and modern line, which focuses on business casualwear.

It is targeting the UK’s millennial shoppers with garments inspired by Polish graphics from the late 1980s. Vinyl trench coats, side-striped trousers and slogan jumpers with block colours draw from parent LPP’s heritage as a company founded in 1991, only two years after the Soviet communist regime fell.

We want to present trends in a slightly different way, with an Eastern European touch

Marek Piechocki

This twist, Piechocki tells Drapers at LPP’s Gdańsk headquarters, is what sets Reserved apart from its competitors. He acknowledges the trend-led nature of fast fashion means there will “always be some similarities” with rival offerings, but Reserved brings something different to the table by staying true to its roots.

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LPP showed the Reserved collection at a shipyard

“How we interpret trends is the key to success. We want to present trends in a slightly different way, with an eastern European touch. We have great artists here in Poland [inspiring our collections],” says Piechocki.

Founded in 1998, Reserved has grown from one 215 sq ft corner shop in the town of Gdynia into a 458-store network in 19 countries that contributed PLN2.7bn (£560m) to group revenue of more than PLN6bn (£1.3bn) for the year to 31 December 2016.

Piechocki wants Reserved to be “one of the top five fashion retailers in the world”. The London opening, which is a play for both domestic shoppers and tourists visiting the city, is an “important step” to achieving this: “We realise it isn’t easy to appeal to London, but I believe that as we build our strengths in eastern Europe and Germany, we can do the same in the UK.”

LPP’s sizeable operations are fuelling its expansion. Its 710,000 sq ft logistics centre in nearby Pruszcz is reportedly the largest in Central and Eastern Europe, employing 1,500 people and sending 1.5 million items every day to its stores. Its ecommerce operations and ten photographic studios are also based there.

More than 200 designers work across its headquarters and design centres in Krakow and Warsaw, headed up by creative director Sho Kondo. In total, more than 700 employees – from buyers to pattern-makers – work on collections across LPP’s brands: it also owns streetwear brand Cropp; music-inspired clothing brand House; women’s smart-casual brand Mohito; and value casualwear brand Sinsay.

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More than 700 staff work across LPP’s collections

Creative roles are divided into garment-specific teams that comprise designers, buyers and in-house pattern-makers. Each team designs and makes sample products to send to suppliers to evaluate before they are ordered and manufactured.

As part of a recruitment drive, Piechocki says the group has hired around 400 employees so far this year across its head offices – half of them new hires in ecommerce – and plans to take on another 1,000 this year. The current headquarters staff count stands at 2,100.

To keep up with the competition, the company plans to move the bulk of production from Asia to Europe, to speed up its processes and lead times. Around 90% of its goods are presently sourced from Asia – clothing is mainly manufactured in China, India, Bangladesh and, to a lesser degree, Poland.

I am very optimistic, and I believe [Brexit] won’t have any bad influence

Marek Piechocki

Piechocki aims to boost the amount manufactured in proximity markets to 50% over the next few years. He says it is making progress: local sourcing for womenswear has reached 20%.

As for trading in the UK, Piechocki is “not at all worried” about entering the market as Brexit unfolds, or the future relationship between the UK and Poland.

“I believe our governments will do their best to normalise things and will come to a compromise – it is in everyone’s best interests. I am very optimistic about this, and I believe [Brexit] won’t have any bad influence,” he says.

“Tourists will not stop coming to London; people won’t stop buying things they like, so I am positive about things that may come.”

With this upbeat outlook, can we expect to see LPP’s other brands follow Reserved into the UK soon?

“They are waiting in the queue,” grins Piechocki. “But I think we firstly have to learn and understand who the British customer is, and how they differ from our other customers, before taking that step.”

Until now this retailer had not registered on the UK’s radar, but it is one to watch out for. A new global player is potentially on the cards.

 

LPP – the facts


Total revenue*: PLN6bn (£1.3bn)

Net income*: PLN170m (£37m)

Suppliers: 500+

Factories it works with: 80

LPP stores**: 1,700+

Trading countries: 20 (including the UK)

Head office staff: 1,750

Reserved revenue*: PLN2.7bn (£560m)

Reserved stores**: 450+

*For the year to 31 Dec 2016

**Including franchises

 

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