Owner of former Reserved, Cropp stores in Russia to close 50 outlets as part of optimizing business

MOSCOW. Nov 8 (Interfax) - The successor of Poland's LPP fashion retailer in Russia, FES Retail, which manages the RE, SIN, CR, XC, and MO stores, respectively, plans to close around 50 outlets, FES Retail said in a statement.

The company plans to optimize its business by closing some of its stores, "following the example of other major fashion operators," FES Retail said.

The closings concern outlets with low turnover, as well as stores in shopping centers where the lease terms and conditions have ceased to be attractive for the retailer.

The company will focus on the remaining outlets, of which there are over 500.

As previously reported, Poland's LPP clothing manufacturer and retailer of the Reserved, Cropp, House, Mohito and Sinsay brands, closed all stores in Russia toward the end of March, and announced a decision in May to sell the business to a Chinese consortium, with China's FES Retail becoming the new owner. The deal did not include the rights to use trademarks and brand names, thus the stores have resumed operation under new signs.

The owner of the Russian operating structure changed at the end of June. United Arab Emirates (UAE)-registered Far East Services-FZKO became the 95% majority owner of Re Trading LLC instead of LPP, with Anna Pilyugina, general director of Re Trading LLC, receiving the remaining 5%.

LPP was one of the largest players on the Russian fashion retail market. Re Trading LLC doubled its revenue to 52.9 billion rubles to Russian Accounting Standards (RAS) in 2021 from 27.35 billion rubles in 2020, and swung to a net profit of 4.86 billion rubles from a net loss of 131.2 million rubles the previous year, according to company data published in the SPARK-Interfax analytical system.