LPP group, clothes designed and distributor, with brands like Reserved and Cropp, has long avoided acquisitions. Now it has changed.
“We are watching trends of clothes companies worldwide and we have come to the point to increase our portfolio of brands through acquisitions”, Dariusz Pachla, LPP deputy CEO said.
The company has no specific target yet but it is watching the Polish and foreign markets (the ones it is already present at).
“We will acquire a company only if we find a really interesting target. We are interested in big companies with sales of several hundreds million zloty, and not small companies. Their prices cannot be high”, Dariusz Pachla said.
In the January-November period, the company had PLN 1.1bn of sales. It wants to grow 30 percent annually. If so, its sales would amount to PLN 2.6bn within three years and PLN 3.4bn, or about EUR 1bn with four years.
“The condition is that we acquire a company with several hundreds million zloty of sales. Adding organic growth and growing sales in LPP shops, we can reach EUR 1bn of sales within 4-5 years. Otherwise, it will be difficult for the company to grow that fast”, Hanna Kedziora, DM PKO BP analyst commented.
Citigroup analysts expect that the company will have PLN 1.27bn of sales, or 50 percent more than last year and PLN 138m of net income, or 236 percent more than in 2006. The stock of the company is at record high and costs about 2,600.
LPP plans to invest PLN 200m next year. It will take PLN 100m of credits. The rest will be its own sources.
“We are building a logistic center in Pruszcz Gdanski for PLN 120m”, Dariusz Pachla said.
PLN 80m will be spent to develop shops. The company has 300 shops today, including 200 in Poland, and the rest in Russia, the Czech Republic, Hungary, Ukraine and Baltic countries. It will soon launch new shops in Romania. In the future, the company will have its shops in Bulgaria and Croatia.
(PLN 1 = EUR 0.278)