New LPP warehouse near Moscow to triple the efficiency of e-commerce operations in Russia
LPP has launched a new warehouse dedicated to processing online orders in Russia — the next step towards strengthening the company’s multi-channel sales. Thanks to the new Fulfillment Center, with an area of 30 thousand m2, this Polish clothing manufacturer will be able to process up to 95 thousand orders per day, increasing the efficiency of servicing the Internet sales carried out in the country by a factor of three. Just a few weeks away from bringing the warehouse online, LPP decided to expand it further. The investment in Moscow’s “PNK Park Zhukovsky” is the company’s response to the potential of the Russian market.
In March of this year, LPP signed an agreement to lease new warehouse space in Moscow’s “PNK Park Zhukovsky” industrial park. This facility, as announced by this Polish clothing manufacturer, was to be online by the third quarter of 2021, but already by June of this year it was processing the first online orders of customers within the Russian market. “Due to the limitations caused by the pandemic, the entire process related to opening the facility involved many challenges and required us to take a completely new approach, engaging many people as well as implementing a largely remote contact formula, with remote monitoring of progress and training online, all of which was an added handicap. Thanks to the strenuous work by the teams, we have successfully completed the entire project and today we can boast the fastest launch of a Fulfillment Center in our history,” emphasizes Sebastian Sołtys, LPP Logistics Director.
The new 30k m2 Fullfilment Center replaces the existing, half the size facility to handle Internet sales for this market. “We have long observed strong interest in what we offer through our online stores among Russian customers. The pandemic period further solidified this trend. It is also necessary to remember that under current conditions the volume of sales depends on logistics, and the existing facility, operating in this area since 2017, restricted us due to insufficient space. The current investment primarily allows us to increase the potential of our stock and storage capacity. Thanks to this, we are not only able to expand the availability of what we offer and increase opportunities for the development of Internet commerce in Russia, but above all we will discover how absorbent this market is. Already within the first weeks following the launch of the new facility we were trading at a 75% higher rate than in the same period of the previous year,” explains Sebastian Sołtys.
Currently the new warehouse has space for up to 3 million items of clothing for the spring-summer season or more than 2 million for the autumn-winter collections. “In the two months since the start of work, we have already broken the historical record in terms of the quantities of goods accepted and shipped, compared to the previous orders served in Russia. Having more workstations allows us to receive up to 100 thousand pieces of clothing per day and process 95 thousand shipments to our customers per day. This represents a threefold increase in our online sales capabilities in the country. The rate of building the storage facilities was as much as 3 times faster than when launching our earlier Fulfillment Centers facilities,” explains Kamil Kawałek, LPP logistics network development manager.
After several weeks of operation, the legitimacy of the new facility was confirmed by a further 10 thousand m2 expansion. The expansion of the storage space allows the Gdańsk-based company to effectively implement its strategy of multichannel development in this region.
Increasing the performance of the Fulfillment Center in Russia is aided by a modern warehouse management system (WMS PSI), based on artificial intelligence algorithms, which helps to greatly streamline the entire order shipping process by shortening the completion path. Even the design of the facility, with its optimal layout of the shipping, acceptance, storage and consolidation zones also favorably affects the work efficiency. A great advantage is also the convenient location of the investment, only 19 km from the Moscow ring road, which greatly improves the handling of orders.
LPP has been developing its global supply and distribution network for several years, so that the entire storage space after the launch of the Fulfillment Center in Russia is now more than 270 thousand m2. Later this year, the company plans to add another 22 thousand m2 of storage space in Romania and complete the construction process of the Distribution Centre in Brest Kujawski, the operational readiness of which is planned for the first quarter of 2022. The total storage area of LPP will then be more than 370 thousand m2.
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LPP is a Polish family company, one of the most rapidly growing in the apparel industry in the Central and Eastern Europe region. For 30 years it has been successful in Poland and abroad, today selling stationery collections in 25 markets, including in such prestigious capitals as London, Berlin, Tel Aviv and Moscow. LPP manages 5 fashion brands: Reserved, Cropp, House, Mohito and Sinsay. At the end of 2020, the company had a network of over 1,800 sales salons totaling 1.4 million m2. The online range of brand collections is available in 30 markets. Based on the global supply network, the Polish clothing manufacturer distributes 259 million items of clothing per year to 3 continents. LPP also has an important role in creating jobs for nearly 22,000 people in the offices and sales structures in Poland, Europe, Asia and Africa. The company is listed on the Warsaw Stock Exchange under the WIG20 Index and belongs to the prestigious MSCI Poland Index.