The boss of the iconic notebook company is leading a retail expansion drive that will see two new stores open in the UK before the year is out.
Valuing a business based on the emotional connection it has with its customers is never an easy sell.
Back in 2006, Arrigo Berni faced that challenge when he set out to persuade private equity firm Syntegra Capital to pay e64m (£50m) to buy premium notebook brand Moleskine in 2006 – when the business’s key product wasn’t much more than a cult bohemian accessory.
“They looked at me with scepticism back then,” says Berni. “It was valued at three times the company’s annual sales.
“Moleskine was really more of a workshop back then, but I knew it was a hell of a brand and its customers had an incredible emotional involvement with the brand.”
Berni convinced Syntegra to dig deep, and then joined Moleskine as chief executive to set about transforming the brand into a retail business.
Eight years later and Moleskine is growing by 20 stores a year, and now it has set its sights on the UK. Moleskine has laid down a footprint of three standalone UK stores and two more will open before 2014 is out.
Career in retail
Getting his backers on board was not the only challenge Berni has faced. His first big role in retailing was to manage a sprawling network of Benetton franchisees in the US, where, he admits the company had overstretched itself and was “starting to show signs of fatigue”.
After two years at a management consultancy in his native Italy, he started a “second life” in retail.
Once again he found himself in the US, this time for luxury brand Bulgari overseeing an expansion plan that took the retailer from two to 12 stores in six years.
From there he spent four years at A. Testoni to improve its supply chain, before helping to lead the acquisition of Moleskine by Syntegra Capital, which is still the brand’s largest shareholder.
Fast-forward to 2014 and Berni has a new challenge on his hands that stems from the nature of Moleskine’s loyal customers.
In the 21st century the core Moleskine shopper – the educated, creative consumer – is likely to be the most interested in adopting digital technologies.
Selling to a digital audience
Berni says this apparent paradox of notebooks and digital is what’s driving Moleskine to innovate.
He explains: “If you’re well-educated and live in a metropolitan area you’re certainly not resistant to technology.
But the digital revolution is an opportunity for us; we’re looking for hybrid partners to bring products to the market that streamline the creative process by allowing them to effortlessly move content from paper to digital.”
In October Moleskine unveiled a collaborative project with software firm Adobe to launch an app that can capture content from its notebooks and transpose them into a digital format.
It’s a big leap forward for the brand, and, Berni says, a very exciting time in its history.
But he acknowledges it’s not plain sailing just yet. Last April the business took the big leap and launched an IPO on Italy’s FTSE MIB, and so far it has been a rocky road.
An initial lukewarm reception by investors has been followed by a steady decline in the share price, despite Moleskine unveiling a three-year expansion plan in March.
But Berni is confident in the strategy and is to press ahead with the rapid expansion plan that has been set in place since the first stores opened in Italy in 2012.
By the end of the year it will have two new UK standalones, one at Boxpark in Shoreditch, and one at Old Spitalfields Market.
Most of all, Berni is confident in the brand and its “emotional dimension”. If he can continue to leverage this, and its digital initiatives, Moleskine will no doubt bring investors on side soon.
MOLESKINE AT A GLANCE
The iconic notebook was used by Vincent Van Gogh, Ernest Hemingway and Bruce Chatwin who immortalised the little black book he nicknamed the ‘moleskin’ in his 1987 novel The Songlines.
- 42 stores currently trading globally
- In 2013 Moleskine reported sales of €87m (£68m) and EBITDA of €33m (£26m)