LPP SA plunged 24% in Warsaw after Hindenburg Analysis took a brief place, wiping out $2 billion from the Polish vogue retailer’s shares.
In a report, the short-seller alleged that the Polish firm — one of many greatest clothes retailers in japanese Europe — hasn’t totally divested its Russia enterprise, and has been promoting its items by way of third events. LPP mentioned it was making ready to reply to the claims.
Earlier than the struggle in Ukraine, Russia was the largest marketplace for LPP following Poland. The retailer, which owns a number of manufacturers together with its flagship Reserved label, suspended its fast-growing Russian operations in March 2022 — within the wake of the invasion of Ukraine — and bought its Russian unit to a Chinese language consortium two months later.
“We think LPP devised an elaborate sham ‘divestment’ strategy to continue retailing in Russia while trying to fool investors and consumers in Poland, Ukraine, and its other markets into thinking otherwise,” Hindenburg mentioned in its report.
Robust public strain pushed Polish firms to retreat rapidly from Russia following the beginning of struggle in Ukraine in February 2022, with consumers boycotting manufacturers which failed to take action.
Hindenburg mentioned it dispatched “secret shoppers” to Far East Providers’ shops in Moscow and St. Petersburg in December, the place almost all clothes they discovered and photographed had “identical designs and colors to fall/winter collections in LPP’s online catalogues in Poland.”
This, the short-seller famous, indicated that LPP merchandise have been nonetheless “somehow making their way into Russia at least 18 months after the claimed divestiture.”
Hindenburg’s report follows some high-profile bearish wagers towards India’s Adani Group and Icahn Enterprises Inc. within the US in 2023, rounding out a exceptional 12 months for the activist quick vendor. The agency, based by Nate Anderson, focused Swiss fintech Temenos final month.
