MIRA INFORM REPORT

Report Date :

22.02.2011

IDENTIFICATION DETAILS

Name :	TWENTY FOUR SEVEN FASHION LTD.

Formerly Known As :	24/7 FASHION LTD

Registered Office :	23 Hachsharat Hayeshuv Street, New Industrial Zone, Rishon Le-Zion 75652

Country :	Israel

Date of Incorporation :	11.04.2007

Legal Form :	Private Limited Company

Line of Business :	Importers and marketers of women's fashion, as well as fashion accessories

RATING & COMMENTS

MIRA’s Rating :

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small

Maximum Credit Limit :	US$ 100,000

Status :	Moderate

Payment Behaviour :	No Complaints

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 – June 30, 2010

Country Name

Previous Rating

(01.04.2010)

Current Rating

(30.06.2010)

Israel

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

Company name & address

TWENTY FOUR SEVEN FASHION LTD.

Telephone 972 3 963 93 00

Fax 972 3 951 55 56

23 Hachsharat Hayeshuv Street

New Industrial Zone

RISHON LE-ZION-75652-ISRAEL

HISTORY & LEGAL FORMATION

A private limited company, incorporated as per file No. 51-396296-9 on the 11.04.2007 under the name 24/7 FASHION LTD., which changed to the present one on the 17.04.2007

SHARE CAPITAL

Authorized share capital NIS 1,000.00, divided into -

1,000 ordinary shares of NIS 1.00 each,

of which 200 shares amounting to NIS 200.00 were issued.

SHAREHOLDERS

1. Eliyahu (Eli) Berkowitz, 50%,

2. Joseph (Yossi) Brosh, 50%.

SOLE DIRECTOR

Joseph (Yossi) Brosh

JOINT GENERAL MANAGERS

1. Eliyahu (Eli) Berkowitz,

2. Joseph (Yossi) Brosh

3. Serge Deri (also General Manager of RENUAR).

BUSINESS

Importers and marketers of women's fashion, as well as fashion accessories, shoes, handbags etc., mainly for young ladies.

Operating a retail chain store under the name "TwentyFourSeven" of 25 stores, located mainly in shopping malls.

Subject is part of the RENUAR Group.

Operating from RENUAR Group premises, in 23 Hachsharat Hayeshuv Street, New Industrial Zone, Rishon Le-Zion. The Group also operates from chain of stores countrywide (mostly franchised, other by the Group). Stores are located chiefly inside shopping malls.

According to a report from March 2010 the RENUAR Group has some 600 employees.

MEANS

Financial data not forthcoming.

There is 1 charge for an unlimited amount registered on the company's assets, in favor of Israel Discount Bank Ltd. (charge placed in May 2007).

ANNUAL SALES

According to reports RENUAR Group's 2007sales were NIS 300,000,000 (including subject)

According to reports RENUAR Group 2010 sales were NIS 250,000,000.

OTHER COMPANIES

RENUAR FASHION STORES CHAIN LTD. (known and trading as "RENUAR" and "RENUAR MAN")

RENUAR FASHION MANUFACTURING & MARKETING (1993) LTD., established 1993,

Both a/m are owned by same shareholders as subject, part of the RENUAR Group, which operates as manufacturers, importers and marketers of women’s and men's fashion wear, footwear and fashion accessories. The RENUAR Group is also operating a retail fashion chain of some 90 & plus branches, using trade names “Renuar” and "Renuar Man" (50 stores for ladies, 42 stores for man, including mixed stores plus several surplus outlets).

BANKERS

Current bank data not forthcoming. Based on our, working with Israel Discount Bank Ltd.

RENUAR Group is also known to be working with Bank Leumi Le’Israel Ltd., branch data not forthcoming.

CHARACTER AND REPUTATION

Nothing unfavorable learned.

Despite our strenuous efforts, we were unable to speak with any of subject's officials as they were too busy or out of office. We left messages, which so far remain unanswered. In past attempts in recent years, RENUAR’s officials refrain from providing data as a matter of policy.

In October 2007 RENUAR launched subject’s chain as a separate sub-chain for young ladies, investing according to reports NIS 35 million in the stores opening and promotion. RENUAR officials said they expect annual sales of NIS 100 million in 2008, reaching some 30 shops be the end of 2008.

Yet, in late 2008, subject’s officials admitted they have not met their goals, said development of the new chain is slower than expected, and only 16 shops were open

RENUAR is considered among the leading and prestigious fashion chain store in Israel.

In 2003 RENUAR launched its "Renuar Man" stores, joining the local trend already exercised by other leading fashion companies FOX and CASTRO.

In october 2010 in a media interview with subject's General Manager he said that RENUAR Group is going through an efficiancy plan designed to unify several men and women stores. The move is expected to save the Group several hundred NIS thaousands annually. This move comes as part of the general slow-down trend in the local fashion retail market, which began in 2009 with the local market reaction to the global economic crisis. While most of the local market stepped out of the slow-down, fashion retail in general still facing difficulties, also due to the amounting competition in view of the entrance of new international fashion actors (GAP, H&M) in 2009/2010 to the local fashion market, which has been highly competitive already.

In December 2010 it was reported that RENUAR Group is investing NIS 10 million in a real estate project of 120 residential units.

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 2009 summed up to US$ 1,267 million, comparing to US$ 1,402 million in 2008 (9.6% decrease) and US$ 1,188 million in 2007. 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 decrease in 2009 reflects the slow-down trend in the local economy during 2009, mainly in the first half of the year, part of the global economic crisis.

According to a local retail research company, retail fashion chains an overall decrease of over 5% in proceeds comparing to 2008. In breaking down the data, it turns that a majority of retails stores witnessed a higher fall of up to 15%, while some stores experienced even a growth. Market reaserch checked 1,100 fashion (cloths and footwear) stores and found that sales reached NIS 2.75 billion (were NIS 2.9 in 2008).

According to the Central Bureau of Statistics, the current expenditure for private consumption in 2009 for clothing, footwear and personal items fell marginally (0.7%) from 2008, when it rose by 4.1% from 2007 (rose then by 7% from 2006). 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).

SUMMARY

Notwithstanding the lack of updated data from subject, considered good for trade engagements.

Maximum credit recommended US$ 100,000.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.45.11
UK Pound	1	Rs.73.25
Euro	1	Rs.61.70

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
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
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
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
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
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended

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%)

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