GDANSK (Reuters) -Poland’s biggest fashion retailer LPP expects its revenue to grow in 2025, driven by double-digit percentage growth in online sales and a rapid expansion of its Sinsay store network, it said on Thursday.

The Gdansk-based retailer, whose stores are located mostly in Central Europe, opened 572 new stores last year, 534 of which were for budget brand Sinsay that competes with fast fashion retailers like Inditex (BME: ITX )’s Bershka.

Sinsay’s business model is centred around expansion into smaller towns, providing budget-friendly fashion in areas with lower retail competition.

"The success of Sinsay, which saw a remarkable revenue growth of nearly +47% in constant currencies in 2024, serves as a clear impulse for LPP’s continued growth based on this sales formula, which is redefining commerce in smaller towns," LPP’s CEO Marek Piechocki said in letter to shareholders.

LPP forecast revenue of 25 billion to 26 billion zlotys ($6.55 billion to $6.81 billion) for 2025, up from 20.19 billion last year. It also sees a gross margin of 53% to 54%, versus 53.1% in 2024.

From 2025 to 2027, it will focus on expanding Sinsay in Poland and Eastern, Central and Southern Europe, with a cautious approach in Western Europe.

It plans to open 1,500 new Sinsay stores and around 100 stores of its other brands this year, including Reserved, Cropp, House and Mohito, aiming to have around 4,400 stores by the end of 2025.

The retailer’s net profit fell 7% to 450 million zlotys in the fourth quarter of 2024, missing analysts’ forecast by 70 million zlotys, as rising operational costs weighed on earnings.

The share of selling, general and administrative costs in its revenue rose to 41% in the quarter, compared to 38% a year earlier, reflecting additional expansion costs and higher labour expenses, LPP said.

($1 = 3.8189 zlotys)