LPP Logistics plans 50% growth in warehouse space by the end of 2025
Nearly two years after taking the helm of the comprehensive operation of the supply and distribution network of the Polish clothing group LPP, LPP Logistics is entering the next stage of significant investments. Due to the planned expansion of the sales network of LPP brands and the growing importance of the e-commerce channel, the logistics operator expects to spend PLN 450 million on development by the end of 2025. According to the plan, the warehouse space managed by LPP Logistics will increase to 700,000 sqm during this time. These investments will allow for the strengthening of operational capacities, thus handling higher volumes and efficient management of deliveries to stores and online stores customers in a total of nearly 40 markets.
The changes observed in the retail industry in recent years have shown that an efficient and comprehensive logistics facility allows business to grow despite market turbulence. A turning point in LPP’s approach to managing the procurement and distribution area was the pandemic and the subsequent geopolitical situation related to the war in Ukraine. It then became apparent that the retail industry was only able to sell as much as its logistics operating capacity allowed. Dynamic changes in the balance of power between sales channels and the growing importance of e-commerce strengthened the LPP Group management board’s conviction that without further investment in this area it would be difficult to maintain the pace of growth. The decision to spin off LPP Logistics from the Group’s structure in 2022 therefore provided the basis for a significant strengthening of the supply and distribution network and started the process of adapting the logistics model to meet the Polish clothing manufacturer’s future growth plans.
– The entire period preceding the establishment of LPP Logistics and our first two years on the market were a stage of adaptation. The difficult geopolitical situation and consumer habits changing like in a kaleidoscope led us to look for a tailor-made operating model that would allow LPP to remain resilient in the face of unfavourable market trends. A key determinant turned out to be a change in expansion strategy and a redirection of the company’s focus from the east to the southern markets. In response to this business need, only within a year our first Distribution Centre abroad was established in Romania. Thanks to investments in warehouse space, technology and automation, we have built a solid logistics hub, which has allowed us to base the development of the LPP Group on a very strong foundation. Today, we are in a very different place than two years ago. We are operating as a team of over 800 specialised experts and, including warehouse staff, 6,000 people work for us. In the light of current business forecasts, we are planning further investments in advance, and our overriding goal is for logistics not to be a roadblock for business development, but to support it effectively – comments Sebastian Sołtys, CEO of LPP Logistics.
This year, LPP Group intends to open 700 new stores in Poland and abroad. In turn, the Gdańsk-based manufacturer wants to double the number of stores over the next three years. In the expansion of its sales network, the company sees an opportunity to double sales by 2023. However, the road to achieving this goal requires an increase in logistics operational capacity. LPP Logistics’ current supply and distribution network comprises eight facilities, including three distribution centres in Poland and the first foreign one in Romania, launched at the beginning of this year, as well as a network of fulfilment centres for e-commerce services. Their total area, which currently amounts to nearly 500,000 sqm, is planned to increase by another 200,000 sqm by the end of 2025. One of the key investments at that time will be the commissioning of a new Distribution Centre facility in Brześć Kujawski in the first quarter of 2025.
– The warehouse in Brześć Kujawski, which was put into operation just two years ago, has allowed us to tap into the brands’ sales potential in Central and Southern Europe. LPP’s ambitious sales network development plans for the next three years have prompted us to double the operational capacity of this facility and increase its area by an additional 85,000 sqm. This will be our largest distribution centre. As the group’s logistics operator, we are also responsible for processing nearly 40 million orders a year from the online channel, whose potential is also growing. Therefore, in the near future, our network will be expanded with additional warehouses to handle e-commerce – one in Poland and one in Romania. Even a year ago it was difficult to predict the scale of further strong e-commerce growth that LPP is experiencing. It is therefore a signal to us that this is the time to invest in the expansion and automation of our facilities – announces Sebastian Sołtys.
By the end of 2025, the company plans to invest PLN 450 million in logistics facilities and equipping them with technology and automation, including, among others, solutions using ACR and AMR robot-based systems. In doing so, the company is focusing on scalable solutions adapted to the dynamic growth of e-commerce. In addition to the already significant potential of the warehouse space, the implementation of technology that allows it to expand rapidly as needs change gives LPP Logistics the flexibility to respond to current business needs.
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LPP Logistics is a logistics operator managing LPP Group’s procurement and distribution network comprising distribution centres and Fulfillment Centres with a total area of nearly 0.5 m square metres. It operates on three continents providing a full range of logistics services – from sea, rail and road freight, through the operation of its own customs agency, to advanced warehouse logistics using modern systems such as WMS, warehouse automation and Warehouse Intelligence solutions based on artificial intelligence algorithms.
LPP is a Polish family business and one of the fastest growing clothing companies in the region of Central Europe. For 30 years, it has been successfully operating in Poland and abroad, offering its collections in such prestigious capitals as London, Helsinki or Tel Aviv. LPP manages five fashion brands: Reserved, Cropp, House, Mohito, and Sinsay, whose offer is available today in stationary and online stores in nearly 40 markets worldwide. The company has a chain of nearly 2400 stores with the total area of over 2 million m2 and distributes clothing and accessories to 3 continents every year. LPP also plays an important role as it employs 43 thousand people in its offices and sales structures in Poland, Europe, Asia, and Africa. The company is listed on the Warsaw Stock Exchange in the WIG20 index and belongs to the prestigious MSCI Poland index.