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LPP’s Russian Rollercoaster

The Polish fashion heavyweight, LPP, just faced a hefty penalty from Poland’s financial sheriffs. They’re shelling out 1.8 million zloty (€420,000) to close an investigation over their hush-hush dealings in selling off the Russian leg of their empire. Quite the saga, right?

The Fine Line With KNF

Last year, Poland’s Financial Supervision Authority (KNF) started snooping around LPP. They suspected LPP hadn’t spilled the beans about the nitty-gritty of selling their Russian subsidiary, Re Trading OOO, back in 2022. Apparently, details were scant, and KNF wasn’t happy.

By October 2024, these probing Poles kicked off administrative proceedings. They hinted LPP might have fluffed their disclosure obligations, keeping the public in the dark about the deal’s juicy details.

Shady Allegations and Stock Shock

Fast forward to March 2024, when Hindenburg Research stirred the pot with claims the divestment was a charade. LPP supposedly let their goods sneak back through Kazakhstan and still pulled the strings from HQ. The scandal sparked a share price nosedive, hacking 35% off LPP’s value overnight. Talk about a rough patch, huh?

In response, LPP didn’t just deny; they charged these claims as a “disinformation attack,” trying to tweak the value of their stock. Even the Polish prosecutors were looped into this stock market drama.

The Deal’s Big Reveal

In April 2025, LPP finally laid out the specs of the 2022 exit plan. The deal? It was penned at $135.5 million to be paid off in chunks by December 2026. Buyers not only had to pay for the goods but also cough up for a €26.5 million loan. The agreement allowed the buyer to return the business if it didn’t pay off. Handy, right?

LPP didn’t leave their brand empty-handed either. They lent a helping hand for logistics and even let the buyer temporarily wave the LPP flag on goods in transit. But make no mistake, those logos had to change eventually.

Where Does That Leave Us?

Despite the commotion stirred by Hindenburg’s report, the financial seesaw seems balanced now. LPP’s stock has bounced back, reaffirming its stature as one of Poland’s top market players. Meanwhile, the KNF’s leniency reduced the initial 3 million zloty penalty to the settled 1.8 million.

Sławomir Łoboda, LPP’s vice-president, chimed in optimistically. He called the reduced fine a nod of stability for investors amidst all the fuss.

Looking Ahead

Marek Piechocki, LPP’s CEO, pointed to the ever-shifting geopolitical tides. He reckoned the world was a different beast when they exited Russia, following external legal cues.

Despite the hullabaloo, LPP’s still strutting as a top Polish behemoth. From Reserve to Cropp, they’re fashion pulse is still beating strong.

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Written by Alicja Ptak, your go-to gal at Notes from Poland, with a past gig at Reuters.