MIRA
INFORM REPORT
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Report Date : |
27.03.2007 |
IDENTIFICATION
DETAILS
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Name : |
HOME CENTER (DIY) LTD. |
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Registered Office : |
P. O. Box 15560 (75054), 7 Tulipman Street, Power Center 2000, Old
Industrial Zone, Rishon Le-Zion 75364 |
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Country : |
Israel |
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Date of Incorporation : |
1945 |
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Legal Form : |
Limited Liability Company |
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Line of Business : |
Retail chain,
importers, marketers and retailers of do-it-yourself products, including: indoor
and outdoor furniture, house ware and sanitary ware and plumbing, tools,
paints, gardening and camping products, electrical and building materials,
electrical appliances and lighting fixtures, household textiles ("Home
Line"), kitchens and car accessories. |
RATING &
COMMENTS
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MIRA’s Rating : |
A |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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56-70 |
A |
Financial & operational base are regarded healthy. General unfavourable
factors will not cause fatal effect. Satisfactory capability for payment of
interest and principal sums |
Fairly Large |
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Maximum Credit Limit : |
€3,800,000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Exist |
Correct Name
HOME CENTER (DIY) LTD.
P. O. Box 15560 (75054)
7 Tulipman Street, Power Center 2000
Old Industrial Zone
RISHON LE-ZION 75364 ISRAEL
Telephone 972
3 968 78 00
Fax 972
3 956 11 29; 969 27 76
HISTORY
Originally incorporated
in 1945, under the name BILU CHOCOLATE AND CANDY FACTORY LTD., which was taken
over by the subject company, incorporated as a private limited company as per
file No. 51-110548-8 on the 21.2.1986, under the name BILU CHOCOLATE AND FOOD
PRODUCTS FACTORY (1986) LTD.
Converted into a
public limited company and registered as such as per file No. 52-003848-0 on
the 4.1.1993.
At a later date
published a prospectus offering shares to the public through the Tel Aviv Stock
Exchange.
On the 11.12.1995 name
was changed to BILU ENTERPRISES (H.C.) LTD., and on the 2.12.2001 name changed
to the present one.
Up until 1998
subject operated as a chocolate and sweet manufacturer. After the ownership
structure changed, when businessman Eliezer Fishman gained control of subject
in 1999 paying US$ 22 million, subject became a holding company and parent to
HOME CENTERS (DIY) LTD. (registration No. 52-004252-4), in which it reached
full ownership in December 2000 after acquiring 13.5% of the shares from the
public, in consideration of NIS 9 million (thus the company was de-listed from
trade on Tel Aviv and Nasdaq Stock Exchange in December 2000).
As of the
1.1.2001, all the activities of HOME CENTERS (DIY) LTD. (registration no.
52-004252-4), which has been active since 1992, were transferred and merged
into subject, and the company was liquidated.
Following a
successful tender offer by Eliezer Fishman in October 2001, he acquired almost
all subject’s remaining shares from the public, in consideration of NIS 14.2 million,
reaching 99.9% of the shares, with intention to purchase the remaining shares
in a constrained manner. Consequently, subject was de-listed from trade on Tel
Aviv Stock Exchange on the 11.11.2001.
On 12.2.2003, HOME
CENTERS (DIY) LTD. and HANDYMAN - DO IT YOURSELF LTD. were merged into subject.
SHARE CAPITAL
Authorized share
capital NIS 10,000,000.00, divided into - 10,000,000 ordinary shares of NIS
1.00 each, of which shares amounting to NIS 3,414,130.00 were issued.
SHAREHOLDERS
Subject is fully
owned by Eliezer Fishman and his family, part of the FISHMAN Group. All shares
are held via trustee POALIM TRUST SERVICES LTD.
DIRECTORS
1. Aharon Meidan, Chairman,
2. Mrs. Anat Menifaz-Fishman,
3. Ms. Ronit Fishman-Ofir,
4. Eyal Fishman,
5. Eliezer Fishman (the above 3 are his
children),
6. Nir Kaplon.
GENERAL MANAGER
David Bikovsky.
BUSINESS
Retail chain,
importers, marketers and retailers of do-it-yourself products, selling over
40,000 items, including: indoor and outdoor furniture, house ware and sanitary
ware and plumbing, tools, paints, gardening and camping products, electrical
and building materials, electrical appliances and lighting fixtures, household
textiles ("Home Line"), kitchens and car accessories.
Sales are mostly
to privates (80%) and to the institutional sector.
Subject has
partnership with several companies which maintain Point of Sales in part of the
branches, among them: CARMEL CARPETS, SODA CLUB, FISHMAN CELLULAR.
Among suppliers:
NISKO, BUILDING & FENCING MATERIALS, BANDA MAGNETIC, CAMEL GRINDING WHEEL WORKS SARID, BRIMAG DIGITAL AGE, PROFILON TRADE, KETER
PLASTIC, AFIK - ILAN EFRAIM, EL-GAL ACRYLIC INDUSTRIES,
JAEGAR SHLOMO, OLAM HABAIT, NIMROD INDUSTRIES, HAGARIN, DELKOL, RETALIX, and
many others.
Operating from
headquarters in 7 Tulipman Street (Power Center 2000), Old Industrial Zone,
Rishon Le-Zion (on a very large area of thousands sq. meters, rented from the
FISHMAN Group affiliate), from a logistics center in Ramle, and from 38
branches nationwide on total area of over 80,000 sq. meters.
Also operate
branch, through subsidiary, in Cyprus.
Having over 1,700 employees.
MEANS
Financial data not
forthcoming. Subject's financial data was available while it was traded on the
stock exchange until the beginning of 2000s. Subject's debt stood on NIS 400
million, while equity was NIS 45 million.
Subject's
Chairman, Eyal Fishman, said in an interview that the debt decreased
significantly in recent period.
According to reports from 2005 and 2006, in the framework of the
possibility that the FISHMAN Group will sell part or all its shares in subject,
company value of US$ 100 to US$120 million was tagged to subject.
Annual advertising
budget: US$ 4 million.
There is 1 charge
for an unlimited amount registered on the company’s assets, in favor of Israel
Discount Bank Ltd.
ANNUAL SALES
Consolidated 1999
sales were NIS 611,634,000, making an operational profit of NIS 16,670,000,
ending with a net loss of NIS 7,913,000.
Consolidated 2000 sales were NIS 801,711,000, ending with a net loss
of NIS 15,568,000 (operating profit of NIS 21,572,000).
Consolidated first 3 quarters of 2001 sales were NIS 710,070,000 (18%
increase compared to the parallel period in 2000), making an operational profit
of NIS 13,530,000 and ending with a net loss of NIS 9,394,000.
Later sales
figures were not disclosed, however consolidated annual sales during 2002 –
2004 were estimated to be NIS 900,000,000.
2006 sales
reported to be around NIS 1,000,000,000. Group's Chairman, Eyal Fishman, said
in an interview that profit is 5% of turnover.
OTHER COMPANIES
Subject has a foreign subsidiary in Cyprus.
HANDYAN – DO IT YOURSELF LTD.
In the retail sector, apart from subject's chain,
Eliezer and his son Eyal Fishman, control the following retail chain stores:
"MEGA
SPORT" (MEGA SPORTING EQUIPMENT (1996) LTD. and OMINI SPORT MARKETING
LTD.) - sporting and apparel goods,
"TOYS ‘R’
US" (RAINBOW - HYPERTOY LIMITED PARTNERHSIP) - toys,
”BEITILI / I. D.
DESIGN” (E.F. DESIGNS - LIMITED PARTNERSHIP) - furniture and household goods
(partnership of the Fishman and Eitani families),
"CELIO"
(FISHMAN CHAINS LTD.), men’s fashion wear chain,
BEST BUY MARKETING
NETWORKS LTD. ("Best Buy" and "Big Box" stores), domestic
electrical appliances.
Subject is part of the FISHMAN GROUP, controlled by Eliezer Fishman, who
fully or partially holds a long list of companies in practically an array of
industrial and commercial sectors in the local market, as well as broad
operations abroad. Holdings include finance and investments (e.g. JERUSALEM
ECONOMIC CORPORATION LTD., real estate and contracting (e.g. DARBAN INVESTMENTS
LTD. and MIVNEY TA’ASIYA LTD.), media (e.g. 24% in YEDIOTH AHRNOTH, Israel’s most
popular daily, 66% in GLOBES, Israel’s economic daily, some 20% in HOT CABLE TV
SYSTEMS LTD.), communications, Internet,
textile (OFFIS TEXTILE LTD.), tires (ALLIANCE TIRE CO. LTD.), food
industry, as well as in many other areas.
BANKERS
Bank Hapoalim Ltd.,
Central Branch (No. 600), Tel Aviv,
Bank Leumi
LeIsrael Ltd., Central Branch (No. 800), Tel Aviv,
Israel Discount
Bank Ltd., Holon Industry Branch (No. 157), Holon.
CHARACTER AND
REPUTATION
In May 2006, it was
reported that Eliezer Fishman, who controls subject (among many other
companies), lost (directly and through his companies) some NIS 1.2 billion in a
forward short deal on the currency of the Turkish pound (which was devalued by
16% against the US$). Mr. Fishman is expected to sell part of his business
group operations in order to cover his losses.
On 31.5.2006, subject closed its short position at a loss of US$
11,178,000.
Mr. Fishman
announced that he will cover all losses to subject and to other public
companies in his group out of his own pocket.
In January 2007
American CAR FRESHNER, producers of aroma spreading items for vehicles, filed a
lawsuit against subject to the Tel Aviv District Court for violating trade
marks (c/a 1066/07).
Apart from that,
nothing unfavorable learned.
Eliezer Fishman is
one of Israel leading and respectful businessman.
We tried to speak with subject's officials, however they were too busy to
take our calls. We left messages, so far un-answered. In the past recent times,
they refused to disclose any details.
Subject is the
leading retail DIY chain store in Israel (competes mainly with “ACE MARKETING
CHAINS"), with estimated 25% market share.
In April 2000 HOME
CENTER was merged with HANDIMAN DIY LTD., another retail DIY chain store owned
by Fishman. The 17-store HANDIMAN (DIY) LTD. chain was acquired from FISHMAN
CHAINS LTD. The HANDIMAN chain annual sales were some NIS 120 million.
In December 2000 subject announced it will acquire the activities of
"BUILDERS”, a retailer of building products, for NIS 600,000.
In February 2001, HOME CENTER received the franchise to represent the
German working tools manufacturer, KERS (not positive of correct spelling).
In June 2002, subject signed a cooperation agreement with NEWPAN,
importers of small electrical domestic appliances by Toshiba, De Longi,
Magimix, etc.
In November 2002, it was reported that subject signed a know-how
agreement with B&Q of the UK (which recently merged with CASTORAMA of
France).
Also in November 2002, it was reported that the FISHMAN Group is
considering merging all administrative activities of subject and BEST BUY,
their electrical products retail chain (49%). In July 2003 subject acquired the
remaining 51% from the Shtrauchler family, and BEST BUY's administrative
activities were merged into subject.
In December 2002, it was reported that subject invested NIS 1.5 million
in a new ecologic department, which includes water and air purification
products.
In March 2005, it was reported that subject will open pet departments in
its stores.
In June 2005 subject inaugurated a new logistics center on a built area
of 10,000 sq. meters (on a plot of 18,000 sq. meters) in Ramle, with investment
of NIS 52 million. The center will provide facilities also to other companies
in the FISHMAN Group. UNITRONICS installed logistic systems in value of NIS 5.5
million.
In July 2005 it was published that subject is looking for a strategic
partner that will invest in subject, in order to finance projected expansion
internationally. According to reports, the FISHMAN Group negotiates the sell of
25% in subject according to a company value of US$ 120 million.
Subject already opened stores in Cyprus (50% by subject, 50% by local
party) and planning opening 4 giant stores (between 6,000 to 10,000 sq. meters
and investment of US$ 2 to US$ 3 million each) in Russia and Serbia. Subject
was negotiating with local Russian investors to enter as partners in the
planned branches in Russia.
In June 2006 it
was published that subject's owner, Eliezer Fishman, is negotiating with the
MARKSTONE Fund to sell subject in consideration of US$ 100 million.
In January 2006 it
was published that CLASS-OR, the concessionaire that operated the lighting
department in subject's stores, entered financial troubles and a freezing
procedure order was issued against them by the Court. CLASS-OR operated in some
34 branches and paid subject fees of around 20% of their turnover. In May
subject acquired their stock in value of NIS 9.45 million.
In March 2006, it
was reported that subject has changed its purchasing strategy, to working
directly with foreign suppliers and manufacturers. That also led to expansion
of new products and lines. Import of home textile and household products
increased considerably from Italy, China, India and Germany.
In parallel,
subject stretched its home design line, under the brand "Home
Collection".
According to
estimations, the local household products market volume reaches NIS 3 billon
annually. Retail chains capture 30% of the market share, specialization stores
20%, while the institutional and workers unions sector has 50% share. Subject
estimates its market share at 10%.
In June 2006 subject
invested NIS 3 million in introducing new furniture lines to its stores. In
August it was reported that subject invests NIS 8 million in new concept in 8
of their stores' design. In September subject launched an advertising campaign
towards the holiday season with investment of NIS 2 million. Another NIS 2
million campaign was launched in March 2007, introducing a new line, "My
Home", for a complete designed home.
Advertising agency
is ADLER HOMSKI & WARSHAVSKY GREY.
In October 2006,
CARMEL CARPETS, local veteran importers and vendors of carpets, opened 12
points of sale ("store within store") in subject's branches,
replacing a previous franchise. CARMEL is owned by the FISHMAN's partners in a
furniture chain. Subject expects revenues to increase by 15% following the
entrance of CARMEL.
SUMMARY
Good for trade
engagement.
Maximum unsecured
credit recommended €3,800,000.
RATING
EXPLANATIONS
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
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71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
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56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit consideration.
Capability to overcome financial difficulties seems comparatively below
average/normal. |
Small |
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11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
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<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
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NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
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This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this
report. The assessed factors and their relative weights (as indicated through
%) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)