LPP’S STANCE ON SETTLEMENTS WITH SEWING FACTORIES IN BANGLADESH

As regards the false reports appearing in the public space about the alleged payment arrears of LPP to the sewing factories located in Bangladesh, we would like to inform that all financial obligations to Bangladeshi suppliers are fulfilled by the company on an ongoing basis.

At the same time, we would like to confirm that recently, due to the outbreak of war in Ukraine and the termination of operations in Russia, the company has experienced temporary disruptions in the schedule of receiving orders from factories.

Furthermore, we would like to emphasise that:

• The temporary suspension of some deliveries is a direct consequence of the outbreak of war in Ukraine and the discontinuance of LPP’s operations in Russia. LPP was faced with this situation at a time of dynamic growth for the Russian company, which accounted for over 20% of LPP Group revenues. As a result of the sale of the entity in May this year, the need arose to manage the merchandise ordered (including for several hundred planned stores, which did not ultimately materialise) for this market, with limited storage capacity in our warehouses. This has translated into a temporary extension of the timelines for receiving orders from suppliers in Bangladesh.
• At the same time, the rescheduling of order receipt allowed for preventing cancellation of orders at the Bangladeshi sewing factories and effective storage of the goods in LPP’s warehouse spaces.
• As a company that is responsible and aware of its obligations towards its suppliers, we are in constant contact with all companies affected by this situation. We hold individual discussions and make arrangements with them regarding the timelines for receiving orders.
• We are also in constant contact with the local trade organisation, Bangladesh Garment Manufacturers and Exporters Association (BGMEA), to be able to ensure the right systemic solutions for our partners.
• At the same time, we ensure that all goods received will be used by LPP. These products will be rescheduled for subsequent seasons and/or offered for sale in Poland or in other markets where we are present.

We would like to reiterate with utmost firmness that the company does not have any outstanding payments towards the sewing factory in Bangladesh.

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LPP is a Polish family business and one of the fastest growing clothing companies in the region of Central and Eastern 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 SA 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 over 1700 stores with the total area of 1.4 million m2 and distributes clothing and accessories to 3 continents every year. LPP also plays an important role as it employs over 24 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.