Reserved puts UK store expansion on hold amid Brexit uncertainty

The Polish fashion brand vice president Przemysław Lutkiewicz spoke to Retail Week about puttings its original plans to expand in the UK on ice.

The retailer currently operates one UK store on Oxford Street in the former BHS flagship.

“The plans [to expand] are on hold because there is still uncertainty around Brexit but secondly we are waiting for the store to prove that we can continuously increase the sales regardless of the economic conditions,” says Lutkiewicz.

“When both have become clear for us we will decide what to do next in the British market.”

The 32,000 sq ft flagship store in the former BHS site on Oxford Street is two years into a 10-year lease and registered a 15% growth in sales to “around £11m” this year – however, the fast-fashion brand’s UK store is still loss-making. Lutkiewicz declined to give exact figures.

Although the UK political environment is unpredictable Lutkiewicz said its store in the UK is still the best performing out of the Reserved 1700 store estate across Europe including stores in Poland, Germany, Hungary, Latvia, Austria and Finland.

“When we look at sales in single stores number one is England second is Munich, Germany, and third is Moscow, Russia,” he said.  

The boss said the challenge it will face in the run-up to Brexit is the uncertainty on the date and the decision to stockpile garments. 

”We are thinking if we should send more inventory to the store just before Brexit, but I think all companies will do the same,” he said. 

Despite the current political climate Lutkiewicz is optimistic when it comes to Reserved’s future in the UK. 

“We’ve been in this business over twenty years through ups and downs so sometimes you have hard times, but you have to go through this. We believe our company is healthy with sound financial spending, so we are in a positive mood when it comes to the future,” he said.