As BHS fades into the sunset, fast-growing Polish fashion chain Reserved will use one of the failed department store’s most high-profile sites for its maiden outlet in the UK.
The fashion chain, which offers clothing for men, women and kids in much similar a vein to H&M or Zara, plans to open a 30,000 sq ft (2,790 sq metre) outlet on the site of BHS’s former Oxford Street store in London.
It may be almost unknown in the UK, but Reserved is part of LPP, one of the fastest growing fashion chains in Europe. Since opening the first Reserved store in 1998, the group has expanded into 18 countries via six chains; from the more upmarket Tallinder to youth brand Cropp.
“We would like to become the world’s top fashion retailer,” said an LPP spokeswoman. “To make the Reserved brand global it has to be recognisable outside eastern Europe. Our presence is quite strong in Poland, Russia and the Baltic region but that is not enough to become a global brand.”
LPP has been seeking a site in London for some time as part of a shift westwards which includes a store opening in Berlin next year. It is also looking for flagships in other western European capitals including Paris and Milan. The London store will take up a third of the former BHS site, including the entire Oxford Street frontage.
Founded 21 years ago by civil engineering graduate Marek Piechocki and fellow entrepreneur Jerzy Lubianiec, whose initials form the basis of the group’s name, LPP listed on the Warsaw Stock Exchange in 2001. It is now one of Poland’s top 20 listed companies.
The business operates across Europe including Germany, the Czech Republic, Lithuania, Croatia, Bulgaria, Estonia, Russia and Ukraine. Last year it expanded into the Middle East, with stores opening in Egypt, Kuwait and Qatar. Next year it is planning to move into Belarus and Kazakhstan via franchise partners as well as opening in London. By the end of this year it expects to have 1,700 stores and is also expanding its global online presence.
“It’s Poland’s answer to Zara owner Inditex,” says Lorna Hall, head of market intelligence at fashion consultancy WGSN. “It’s a very professional outfit which has benefited from Poland’s fast-growing market which is switched on to fashion and has a young family-focused demographic.”
The Gdańsk-based clothing retailer employs about 20,000 people globally and at present has more than 1,600 stores. In 10 years it has increased store numbers sixfold while sales have risen by more than €1bn (£840m) to reach almost €1.3bn last year, 70% of which are booked in Poland.
Ray Gaul, head of global research and analytics at consultancy Kantar Retail, said after moving into its first western European country, Germany, in 2014 LPP must have gained confidence that Reserved could travel outside eastern Europe. He added that in the UK, the brand would benefit from being well known to Polish emigrants.
“The Polish now make up the largest [non-British] ethnic group in the UK. That’s a good sign for Reserved. They will already have a strong foundation of expats who would recognise the brand and are perhaps interested in shopping there,” he said.
Hall agreed Reserved would be helped by being recognisable to Polish families living in and visiting the capital. However, she said that the chain’s family ethos, which is less trend led than the likes of Zara or H&M and priced somewhere between H&M and Primark, would not necessarily take off here. “The UK is the most competitive market in the world. LPP will know this market and will have visited often but it’s still challenging for retailers coming in because there is already so much choice.”
She said having a site in London was important for brands wanting a global presence, with LPP’s move likely to be more an international marketing statement rather than the start of a significant UK presence.
LPP confirmed it did not have plans for more UK stores but would be launching online here at the same time as it opens its Oxford Street site.
The spokeswoman said: “We know the UK is a tough market but this flagship on Oxford Street is a marketing move. We want to show our clients we are a global brand – if they go to Berlin, the UK and the Middle East they will see the Reserved logo everywhere.”
The move into London comes at a time of rapid growth for LPP, although its main Reserved brand has experienced some difficulties after relying perhaps too heavily on one fashion trend: the retro look.
It has now hired a new creative director to help overhaul its range and is revamping its products and logistics operation.
Gaul said: “Most of LPP’s success has so far been with its Reserved brand but now it is diversifying, which is a good sign. It is getting a good mix of up and coming brands focused on different types of consumer to balance out any ups and downs. You often find in fashion that when the more luxury brands are not performing the discount brands do so – that’s a natural hedge.”
In the UK, he suggested LPP will have to step up its game online, in a market where tech-loving UK shoppers expect to be able to browse via mobile phones, tablet computers or apps.
Keeping pace with the highly competitive UK market, where online shopping continues to challenge traditional high street players, will just be part of LPP’s challenge to ensure it’s not just another three letter acronym footnote in history. That was the fate of BHS after all.