LPP shares nosedived on the Warsaw Stock Exchange following news that Poland’s top clothing retailer significantly slashed its expansion plans for Russia and Ukraine. Investors were spooked by the fact that the company recently cut the amount of new space it had planned for those two countries by half. LPP share prices dropped to PLN 7,800 a share from PLN 10,900.
The drop comes despite highly positive recommendations from Poland’s top brokers over the past few months. “Before the Russian-Ukraine tensions, LPP has been showing great potential with its expansion plans on Poland’s eastern markets,” said Wojciech Zych of Quercus TFI brokerage office. “These are not yet developed markets, with a substantial pipeline of new shopping centers set to go on-line, which made for a favorable growth environment for LPP on these markets.”
Adam Łokojć of Skarbiec TFI brokerage house points out that this recent shift in strategy by LPP is crucial for the company’s operations. “There’s no guarantee that LPP will be able to fill this gap with new openings on western markets,” he says.
