One of the largest chains of clothing retailers/Caravan
The owner of one of the largest chains of clothing retailers in Europe – Reserved, Sinsay, Cropp and Mohito – simulated an exit from the Russian market. Although at the beginning of the full-scale invasion, they announced the closure of stores, but in fact continued to operate in the Russian Federation.
The Polish company LPP, which owns Reserved, Sinsay, Cropp and Mohito stores, simulated an exit from the Russian market. This was noted in the report of the American research company Hindenburg Research.
Russia was the largest international market for LPP, accounting for around 19.2% of revenue from 553 stores until February 2022. Since the beginning of the full-scale invasion of Russia on the territory of Ukraine, the company announced its exit from the Russian market.
However, after Hindenburg Research published a report on the acquisition of the company in the 2022-2023 financial years, it turned out that the retailer LPP increased its revenue by 40.5%.
We believe that LPP was able to post such excellent results because its rejection of the Russian business was a fraud, the article states.
The company itself, which deals with large chains of clothing stores, calls this report an information attack. According to them, such activity may be an attempt to gain influence over the company.
It is interesting that after the publication of the Hindenburg Research report LPP shares fell by 35%.
How did the exit from the Russian market take place?
- In May 2022, the owners of Sinsay and Cropp announced the sale of the Russian division to the Chinese consortium Re Trading for $382 million. The buyer was the Dubai company Far East Services, which was registered the day before the sale agreement, and the company also has no ties to China.
- According to Hindenburg, they sent mystery shoppers to Far East Services stores in Moscow and St. Petersburg and found that almost all the clothes were identical in design to the fall/winter collections in LPP Poland's December 2023 online catalogs.< /li>
- In Hindenburg, it is noted that the goods could be delivered through Kazakhstan. Because LPP supplied its Kazakhstan subsidiary with about $755 million worth of goods in 2023, even though Kazakhstan only accounts for 1% of LPP's brick-and-mortar stores.
One of the largest chains of clothing retailers/Hindenburg Research
LPP Group is a leader not only among Polish retail companies in Ukraine, but also among other foreign brands in the fast fashion segment. It “holds” 10% of organized retail, Pro-Consulting calculated.