In a firm rebuttal to the accusations laid out by Hindenburg Research, LPP Group, the Polish clothing manufacturer behind renowned brands such as Reserved, Cropp, Sinsay, House, and Mohito, has vehemently denied claims of continuing operations in Russia. The company's statement comes amid allegations suggesting that LPP's exit from the Russian market was a facade.
LPP Group has clarified its stance, emphasizing the sale of its Russian business in 2022 to an entity not affiliated with LPP, in an effort to maintain company stability and ensure the safety of its employees. "From the moment the decision to sell the Russian company's assets was made, neither LPP nor any members of its management team had any intention or plan to resume operations in the Russian market," the company stated.
Marek Piechocki, CEO of LPP, labeled the accusations by Hindenburg Research as "false" and criticized them as attempts to manipulate and inflict harm not only on the company and its employees but also on investors and business partners, motivated solely by a desire for profit.
According to the sale agreement made in 2022, the Russian entity continues to sell products in Russia, including those acquired during a so-called transition period. The company's press service highlighted that the payment for the company's sale, including receivables from stores amounting to 601 million Polish złoty, was split into tranches. The transition period is expected to last until the end of 2026 at the latest, which does not imply LPP's continued trading in Russia.
Under the terms of the agreement, during the transition period, LPP was obligated to supply goods to the purchasing agents of the investor (FGT and AFIE companies), which are not connected to LPP and operate entirely independently.
It's worth noting that the shares of the Polish retailer LPP (brands Reserved, Cropp, and Sinsay) plummeted by more than 35% following the publication of the Hindenburg Research report, which accused LPP of fictitiously selling its business in Russia and possibly maintaining control over its operations in the country. LPP has dismissed the report as a disinformation attack.
