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UPDATE 1-Moleskine plans to increase investment in expansion
August 6, 2013 / 6:03 PM / 4 years ago

UPDATE 1-Moleskine plans to increase investment in expansion

(Adds CEO and CFO comments)

By Isla Binnie

MILAN, Aug 6 (Reuters) - Upmarket notebook maker Moleskine expects to increase its capital investment this year to boost growth by expanding its e-commerce and retail business, the company said on Tuesday.

The newest addition to Milan’s bourse said it sees double-digit growth for the rest of 2013 and an increase of around one million euros in total capital expenditure for the full year from the 5 million to 6 million euro range it had previously indicated.

“We are seeing the opportunities and potential,” said chief financial officer Alessandro Strati, adding the company would invest in new shops and online business following the launch of its first Chinese online shopping portal.

“We might expect these investments to be actually higher which means in a range of 6 to 7 million, and this should be our run rate also for the future.”

The company said it expects double-digit growth for the remainder of the year and was already seeing a positive contribution from its new Beijing store, which has around three times the floorspace of its standard 50 square-metre shop.

First-half adjusted net profit dropped 3.3 percent year-on-year to 8.7 million euros ($11.58 million), as higher turnover was offset by costs linked to its April listing and ongoing investment in its expansion, Moleskine said.

Moleskine’s April IPO made it the first and only company to list on the main Milan stock exchange so far this year, but the stock quickly slipped below its 2.28 euro listing price and has stayed below that level. Shares closed at 2.05 euros on Tuesday before the results were released.

As well as expanding its retail network, the company introduced monogrammes for its leather-bound, Ernest Hemingway-inspired notebooks earlier this year in a bid to increase its brand visibility.

“Diluting the brand is not really a concern for us,” chief executive Arrigo Berni said on Tuesday’s conference call.

Moleskine plans six new store openings by the end of the year, including two in China, two in the United States and two in Europe. ($1 = 0.7513 euros) (Reporting By Isla Binnie; editing by David Evans)

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