Merlin.pl to establish multi-branch e-commerce group

2007-06-01

Merlin.pl, the largest online store in Poland selling books and multimedia, intends to set up a large retail group that would offer various kinds of products.
The company has recently acquired a 57% stake in Presco Media, the owner of e-Cyfrowe.pl, an online store with photo and video equipment. The acquired company will receive PLN 1m (€0.26m) from Merlin.pl as a support for marketing, technical development and promotion. E-Cyfrowe.pl will continue to operate under its own brand. It forecasts that in 2007 it should earn revenues of PLN 17m (€4.5m) in contrast to PLN 13.5m (€3.6m) in the previous year.
According to Merlin.pl, the acquisition is a part of the new strategy of expanding outside the existing areas of interest. The firm is going to build an e-commerce platform around Merlin.pl by adding new kinds of products and new stores that operate in different fields. It is now preparing for the launch of cosmetic products sales as well as those for the household and garden.
The company emphasises that relying on the natural development of the e-commerce market and growth of the number of people shopping online is not enough. Therefore, Merlin.pl plans to acquire more online stores operating in the Polish market. The company is going to invest PLN 3m (€0.79m) in new business areas and spend around PLN 8m (€2.1m) on advertising. The investments are to be financed from the firm’s reserves and from current profits. In 2006 the sales revenues of Merlin.pl came to PLN 63m (€16.6m) and the figure is expected to grow to PLN 90m (€23.7m) in 2007.

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