UPMARKET clothing retailer Joyce Boutique Holdings says it has performed more than satisfactorily in the first half ended September. It reported yesterday it planned to spend $100 million on business expansion and diversification next year. Issuing new shares to raise capital was one of the options being considered but no decision had yet been made. The fashion house yesterday announced a 10.5 per cent increase in net profits to $34.73 million from $31.42 million in the same period last year. Turnover rose 17 per cent to $496.12 million from $423.99 million. Earnings per share rose to 13.4 cents, up 10.7 per cent from 12.1 cents previously. Shareholders would be paid an unchanged interim dividend of 3.5 cents a share. The company said the results were achieved amid poor retailing conditions in Hong Kong and Taiwan and despite start-up costs incurred by expansion in the territory and in the region. The company experienced a slowdown in high-fashion retailing in the territory. In Taipei, its branch recorded a loss of $8 million. Managing director Roberto Dominici said he did not expect the state of the retailing market to change significantly, and forecast that difficult times would persist for the next few months. The company is stepping up expansion and diversification plans as a long-term strategy to combat the unfavourable retailing climate. It will invest $100 million on those efforts next year, including the opening of two mega-outlets in Hong Kong and Thailand. About $45 million would be invested in the Hong Kong store while investment in the Bangkok outlet would cost $20 million. About $15 million would be spent on opening two Joyce Cafes in Hong Kong and to franchise the brand name in regional markets. About $8 million was to be used to develop Emporio Armani boutiques and the balance would be allocated to smaller projects involving individual shops. The new shop in Hong Kong would be a merger of seven boutiques which would be replaced by a large World of Joyce Store in Nathan Road, Kowloon. Company finance director Horace Lee said the new 47,000 sq ft store could provide returns in its first year of operation even if consumer demand was poor. 'We are only merging the Kowloon shops and we have confidence the new store will fare better than the original stores,' he said. The Bangkok store was expected to break even in the first year and make profit from the second year, Mr Lee said. A slowdown in consumer spending on luxury items has meant the fashion house would introduce more medium-priced merchandise. At least 40 per cent of the inventory at the Nathan Road store would be in the medium-price range, Mr Dominici said.