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Lithuania’s Apranga is preparing for 2013 and competition with H&M

Rimantas Perveneckas
Gretos Skaraitienės/Žmonės.lt nuotr. / Rimantas Perveneckas
Šaltinis: BNS

Apranga, the Baltics’ biggest clothing retailer controlled by MG Baltic concern, does not expect the market environment to deteriorate next year.

However, Rimantas Perveneckas, CEO of the company that is working out its budget for 2013 now, admits that the retailer’s performance next year might be affected by competition with Hennes & Mauritz (H&M), the Swedish clothes retail giant that intends to enter Lithuania’s market in 2013.

With competition getting stronger, the group plans new investments in Latvia and Estonia. It might also invest in Belarus if the environment is favorable.

“We are working out the draft budget now and it should be approved around Christmas time,” Perveneckas told BNS.

Apranga did not envisage any indications that would signal deterioration in market environment, he said. However, the Lithuanian company representing Spain’s Inditex would take into consideration the plans by its competitor H&M to open several stores in Lithuania in the fall of 2013.

“We do not think that the sales could decline, yet their growth might decelerate. We believe that the sales will grow at a faster rate in the first half of next year and the growth might possibly slow down in the second half,” Perveneckas told BNS.

Apranga, which has been posting impressive sales growth rates this year, continues to invest in the upgrade and expansion of its chain actively. The group saw its sales increase by 23.6 percent, year-on-year, to 476.8 million litas (EUR 138.2m), in January through November.

“We are the first clothes trader of such a size to demonstrate the growth rates of such a scale after the crisis. Our stores are modern and compliant with the most up-to-date requirements. We are also working on new projects, yet it would be premature to talk about them now,” Perveneckas told BNS.

The group, which entered the footwear and accessories’ retail segment earlier this year, might also consider projects outside the clothing sector, Perveneckas said. “We still have many things to do in the Baltic countries; we plan investments in Latvia, Estonia.”

The group continued to eye the Belarusian market, yet remained cautious due to its risks, he said.

“However, if the circumstances turn favorable, we will be able to open there quickly,” Perveneckas told BNS.

Apranga did not consider expansion to other countries, including Poland, he said.

“Our strategy remains unchanged – we have to be the leaders or at least the second biggest in the market. And Poland is a very large market with many players, which compete strongly and expand aggressively. It is too late for us to go there,” Apranga CEO said.

The Apranga Group reported 26.638 million litas in consolidated net profits for the three quarters of this year, almost a two-fold increase from 14.815 million litas in the same period last year.

As of 30 September, MG Baltic's investment arm, MG Baltic Investment, held 53.7 percent of Apranga, which is quoted on the blue-chip Main List of the NASDAQ OMX Vilnius Stock Exchange.

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