MIRA INFORM REPORT
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Report Date : |
16.08.2011 |
IDENTIFICATION DETAILS
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Name : |
HONIGMAN & SONS LTD |
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Registered Office : |
58 Salame Road, Tel Aviv 66074 |
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Country : |
Israel |
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Year of Establishment : |
1947 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Manufacturers (via foreign subcontractors abroad), importers, and marketers
of women, men, and children fashion, operating fashion retail store chains |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Status : |
Satisfactory |
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Payment
Behaviour : |
Usually Correct |
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Litigation : |
Clear |
NOTES :
Any query related to this report can be made on
e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – March 31st, 2011
|
Country Name |
Previous Rating (31.12.2010) |
Current Rating (31.03.2011) |
|
Israel |
a2 |
a2 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
Company name & address
HONIGMAN & SONS LTD.
Telephone 972 3 680 55 00
Fax 972 3 518 05 75
58 Salame Road
TEL AVIV 66074-ISRAEL
HISTORY & LEGAL FORMATION
Originally established as a non-registered
business in 1947.
Converted into a private limited company and
registered as such as per file No. 51-084496-2 on the 19.02.1980.
SHARE CAPITAL
Authorized share
capital NIS 2,050,000.00, divided into -
2
management shares (issued),
2,049,991
ordinary "A" shares (349,992 shares issued),
7
ordinary shares (6 shares issued), all of NIS 1.00 each,
of which shares
amounting to NIS 350,000.00 were issued.
SHAREHOLDERS
1.
Jacob Honigman, 50%,
2.
Micha Honigman, 50%.
DIRECTORS
1.
Micha Honigman, born 1953,
2.
Jacob Honigman, born 1945, founder of subject, brother
of Micha.
GENERAL MANAGER
Micha Ronen
BUSINESS
Manufacturers (via foreign subcontractors
abroad), importers, and marketers of women, men, and children fashion,
operating fashion retail store chains under the following categories:
“Honigman” - for women, over 55 shops,
“TNT” - for young ladies, some 53 shops,
“Honigman Menswear”, for gentlemen,
“Honigman Kids” - for kids, over 55 shops
(including the “Virus” brand of extreme fashion of kids).
“Honigman Baby”, for babies.
Altogether operating some 170 shops in
Israel, all operated by subject, no concessionaires. All subject’s sales are to
the local market.
Via subsidiary,
operating 9 stores in Europe, mainly in Romania. In addition, via
concessionaires, operating 3 stores in Russia.
Manufacturing is
carried out via subcontractors in India and China.
Most of subject’s
suppliers are foreign.
Advertising
agencies: YEHOSHUA TBWA, DAVID.
Operating from
main premises (offices and logistics center), on an area of 10,000 sq. meters
(5,000 owned by subject and 5,000 rented), in 58, Salame Road, Tel Aviv, and
from another logistics center, on an rented area of 3,000 sq. meters, in 6
Plotisky Street, Old Industrial Zone, Rishon Le-Zion.
Operating from
some 170 retail stores nationwide.
Having in all some
1,200 employees (similar to 2010 and 2009).
MEANS
It was reported
that during 2007 subject invested NIS 7 million in the upgrading of 7 branches
and NIS 13 million in opening 18 new shops.
In December 2007,
it was reported on NIS 10 million investment in opening 8 new TNT shops
(concept stores, of 200-400 sq. meters each).
Owned property in
58 Salame Street, Tel Aviv valued at several US$ millions.
2008 advertising
budget of all chains is reported to be NIS 20 million.
There are 16
charges for unlimited amounts registered on the company's assets, in favor of
Bank Hapoalim Ltd., Mizrahi Tefahot Bank Ltd., The First International bank of
Israel Ltd., Union Bank of Israel Ltd., Israel Discount Bank Ltd., Mercantile
Discount Bank Ltd., Bank Leumi Le’Israel Ltd. and IBM Company.
REVENUES
· 2005 sales were circa NIS 250,000,000.
· 2006 sales reported to be NIS 300,000,000.
· 2007 sales claimed to be NIS 317,000,000.
· 2008 sales claimed to be NIS 350,000,000.
· Later sales figures not forthcoming.
OTHER COMPANIES
· HONIGMAN ROMANIA S.R.L, 100%, operating shops in Romania.
· HONIGMAN AND SONS ASSETS (1986) LTD., sister company, a holding company.
BANKERS
· Mizrahi Tefahot Bank Ltd., Tel Aviv Main Business Branch (No. 461), Tel Aviv.
· Bank Leumi Le’Israel Ltd., Allenby Business Branch (No. 802), Tel Aviv.
CHARACTER AND REPUTATION
Two motions for
class action lawsuits were filed against subject in early 2011, one by
employees (claiming subject does not pay for overtime), the other by customers
(on grounds of allegedly violating the law concerning advertising for youth in
the "sexual context"). Both claims still have to be approved as such
by Court (regarding the latter claim, subject was instructed to remove outdoor
posters considered explicit by the Fair Consumption Commission, although
subject denied any allegations).
Apart from that,
nothing unfavorable learned.
Despite our efforts, we were unable to speak with subject's officials,
as they were always unavailable. We left messages which so far remain
unanswered.
Subject, like other local fashion retail chains, has been suffering from
the slow-down in the local fashion arena in 2009/2010, also part of the general
slow-down in economy in the first half of 2009. Although in most branches there
was a recovery, the fashion sector trample – see more below. Subject has been
taking streamlining measures, and according to reports plans to close down 5
shops during 2011 (after closing 2 shops in 2010). In November 2011 it was
reported that subject is closing 3 TNT losing branches. Yet, subject’s new
appointed General Manager, Mocha Ronen (taking the position from subject’s
shareholders who used to manage the chain all the years), said they plan to
open 6 new shops during 2011-2012. Some of the new shops are joint for men and
women. Subject also reportedly made downsizing in its logistics and operations.
Subject is a long
established company enjoying a good reputation in its field. It is among the
local leading and popular fashion chain stores with remarkable rate of growth
in last years, like several other local fashion chains.
In May 2007, it was
reported that subject is opening a TNT retail chain in Romania, with its first
shop, to be followed by 5 more shops till end of 2007, with total investment of NIS
6 million. The plan was to open 40 stores within next 3-4 years in Romania.
However, due to the global economic crisis which badly hit Romania, in January
2011 subject decided to close all 9 shops operating in this country, which
inflicted losses of NIS millions, according to reports.
In February 2009 it was
reported that subject is opening a "Honigman" store in Moscow,
Russia, further to 2 stores of TNT in Sibiria.
Reports in the media in the last several years on
subject:
April 2008: renting
120 sq. meters for a new “Hongman Kids” shop in Hazahav Shopping Mall in Rishon
Le-Zion, paying US$ 62 per meter per month, in a 6 years contract.
July 2008: opening shops in
the new Teberias shopping mall of “Honigman Women”, “Honigman Men” and “Honigman
Kids” (jointly) on total area of 450 sq. meters, as well as “TNT” shop on
further 200 sq. meters.
October 2009:
Opening “Honigman Men” shops in G-Mall in Kfar Saba and in Big Fashion Center
in Nazareth, part of the strategy of concept shops which combine women and men
department. Investment in the move NIS 2.5 million. In December opened further
2 “Honigman Men” shops in Afula and in Lev Hadera Mall, investment NIS 800,000.
January 2010: Openning a
new shop for “Honigman Men” brand in Hakeryon Mall, a shop on an area of 100
sq. meters, with investment NIS 500,000.
In July 2010 it
was reported that TNT (subject’s sub-chain) is replacing its advertising agency
to DAVID agency, which will take care of TNT advertising budget, estimated at
annual volume of NIS 4.5 million.
In December 2010
it was reported that subject received the exclusive license to market in Israel
fashion accessories of the American pop star Justin Bieber.
In March 2011 it
was reported that subject's TNT chain is launching a joint campaign (investment
of NIS 500,000) with the international brand 'Puma', for marketing specially
designed snickers.
The
local textile and fashion market is valued at NIS 7.5 billion per annum, NIS 6
billion of which is attributed to the fashion branch.
According to surveys, around 50% and more is women's
fashion. Moreover, 40% of fashion stores in Israel belong to fashion chains,
the rest being private shops.
Import of Clothing and Footwear in 2010 summed up to US$ 1,437 million,
comparing to US$ 1,267 million in 2009 (13.4% increase, as the local market
experienced a slow-down) and US$ 1,402 million in 2008. Most import comes from
China. Main other countries of origin for textile goods are France, Italy, Hong
Kong and Turkey, Spain and the U.S.A.
The local fashion
market was suffering from slow-down during 2009, and the trend continued into
2010, although in a less extent. According to a
local retail research company, retail fashion chains witnessed in
In addition new
international fashion players (GAP, H&M) entered in 2009/2010 to the local
fashion market, which has been highly competitive already.
On top of that,
fashion retailers suffered from the late and short winter, adversely hitting 2011
winter collection – which negatively contributed to the trend in the sector.
According
to the Central Bureau of Statistics (CBS), the current expenditure for private
consumption in 2010 for clothing, footwear and personal items fell by 5.1% from
2009, continuing the decreasing trend in 2009, though in an higher magnitude
(in 2009 it fell marginally (0.7%) from 2008, after rising 4.1% from 2007).
This happened in contrast to the general trend in the local market in 2010,
where expenditure level for private consumption actually increased.
According
to surveys, average spending per houshold on clothing & footwear in 2008
reached NIS 483 per month and fell to around NIS 455 per month in 2009 (similar
level as 2007).
According
to surveys, retail fashion chains witnessed significant decrease in proceeds.
SUMMARY
Good for trade engagements.
Note: The telephone
nos. you gave are old ones and irrelevant (please refer to the correct numbers
in caption).
FOREIGN EXCHANGE RATES
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
Rs.45.37 |
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UK Pound |
1 |
Rs.73.53 |
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Euro |
1 |
Rs.64.37 |
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 |
Capability to overcome financial difficulties seems comparatively
below average. |
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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NB |
New Business |
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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%)
This report is issued at your request without any risk
and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its
officials.