(The author is a Reuters Breakingviews columnist. The opinions
expressed are his own)
By Quentin Webb
LONDON, March 13 (Reuters Breakingviews) - Moleskine is
opening a new chapter in the annals of aggressive flotations.
The maker of sleek black notebooks is seeking an initial public
offering in Milan. The "equity story" is based on strong
branding, growth and margins. Investors must now choose whether
they want to go along with another tale of consumer infatuation.
The Moleskine saga begins with some creative
self-mythologising. In 1997, the company created a brand from
the generic term for oilcloth-covered notebooks, which had grown
hard to find. Original - and long-dead - aficionados such as
Ernest Hemingway and Bruce Chatwin were then invoked to bolster
the newly trademarked product.
Moleskine has since grown at a fast pace. The iPad may be
everywhere today, but creative sorts still tend to sketch or
write by hand. Moleskine has started to hedge its bets by
selling all manner of "nomadic objects", up to and including
covers for laptops and e-readers. EBITDA at the private
equity-backed group hit 33.5 million euros last year, on revenue
of 78 million euros. Both figures have roughly doubled in just
UBS, an IPO adviser, reckons the group could now be worth
515 to 775 million euros, according to pre-deal research seen by
Reuters. The bank thinks sales could grow about 18 percent a
year through to 2017, and assigns a price of 20 to 25 times 2014
earnings. That matches the rich valuations for fast-growing
makers of posh consumer goods, such as Michael Kors (KORS.N),
Mulberry (MUL.L) and Lululemon LLL.TO.
If this float is successful, it would be a milestone:
notepads would probably be the most mundane addition to the
high-end consumer goods sector. But there are good reasons for
scepticism. Anyone can make swanky notebooks, even if Moleskine
has a good name and distribution network. The brand so far lacks
credibility in newer areas such as bags and glasses. And there’s
always the hard-to-quantify risk that Moleskine loses its cool -
perhaps by becoming too ubiquitous or too diverse.
Consumer hits can make terrible investments: look at
Skullcandy (SKUL.O) headphones, Heelys roller-shoes, or Pandora
(PNDORA.CO) jewellery. And premium valuations depend on robust
future growth expectations: if those collapse, share prices
follow. "To Have And Have Not" is a nasty feeling for investors.
SIGN UP FOR BREAKINGVIEWS EMAIL ALERTS:
- Moleskine, the Italian notebook-maker, has begun
marketing a planned initial public offering, sources told
Reuters on March 4. The company said it had filed a request to
list in Milan. The company plans to list a 50 percent stake,
comprising both new and existing shares, two of the sources
- The Milan-based company has about 130 employees. It is
controlled by Syntegra Capital, a private-equity fund that was
once part of Societe Generale, which owns a 67.7 percent stake.
The remainder is split between Index Ventures, a venture capital
firm that owns 15.2 percent; founder Francesco Franchesci, with
10.6 percent; and company management with 6.5 percent.
- Moleskine’s January registration document (in Italian): link.reuters.com/nyj66t
Reuters: Italy’s Moleskine kicks off share listing – sources
- For previous columns by the author, Reuters customers can
click on [WEBB/]
(Editing by Pierre Briançon and David Evans)
Keywords: BREAKINGVIEWS MOLESKINE/
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