MIRA INFORM REPORT
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Report Date : |
04.01.2011 |
IDENTIFICATION DETAILS
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Name : |
CASTRO MARKETING 1985 LTD. |
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Registered Office : |
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Country : |
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Financials (as on) : |
30.09.2010 |
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Date of Incorporation : |
15.04.1985 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Designers, Importers,
Manufacturers, Exporters, marketers
and retailers of women and men
wearing apparel, footwear and fashion accessories. |
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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Maximum Credit Limit : |
US$ 2,000,000 |
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Status : |
Satisfactory |
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Payment
Behaviour : |
No Complaints |
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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 – June 30, 2010
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Country Name |
Previous Rating (01.04.2010) |
Current Rating (30.06.2010) |
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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
CASTRO MARKETING 1985 LTD.
(In Hebrew: CASTRO SHIVUK 1985 LTD.)
Telephone 972 3 555 45 55
Fax 972 3 555 45
54
Industrial Zone
BAT YAM-59590-ISRAEL
HISTORY & LEGAL FORMATION
A private limited
company, incorporated as per file No. 51-106440-4 on the 15.04.1985.
Subject assumed
part of the activities of parent company, CASTRO MODEL LTD., incorporated in
1973, which was originally founded as a non-registered business in 1947.
In November 2006,
all activities of CASTRO MEN (1997) LTD. were merged into subject and during
2009 CASTRO MEN was fully merged into subject.
SHARE CAPITAL
Authorized share capital NIS 2,000.00, divided into -
2,000 ordinary shares of
of which 1,000 shares
amounting to
SHAREHOLDERS
Subject is fully
owned by CASTRO MODEL LTD., a public limited liability company whose shares are
traded on the Tel Aviv Stock Exchange, controlled (67.6%) by the Castro family
(the u/m directors). (Subject itself holds 7.05% of CASTRO MODEL LTD.)
DIRECTORS
1. Gabriel (Gabby) Rotter –
General Manager (son-in-law of Mr. Aharon and Mrs. Lena Castro).
2. Aharon Castro,
3. Mrs. Lena Castro, wife of Aharon,
4. Mrs. Esther Rotter, daughter of the Castro
couple and wife of Gabby.
BUSINESS
Subject is a main
part of the CASTRO MODEL Group which operates as designers, importers,
manufacturers (via subcontractors in Israel and abroad), exporters, marketers
and retailers of women and men wearing apparel, footwear and fashion
accessories (belts, handbags, wallets, etc.).
Also wholesalers
of its products to concessionaires of the Group's stores abroad.
CASTRO MODEL
Group includes 169 stores, as follows:
135 fashion
apparel stores both for women ("Castro") and for men ("Castro
Men") in
23
"Diva" fashion accessories stores in
33 stores abroad
(of which 18 are operated by subject's subsidiaries and the rest are operated
by concessionaires, in
(Stores that sell
both men and women apparel are considered double stores).
Among CASTRO
suppliers: JAMTEX MODE, ADI LIN FASHION ACCESSORIES, I.M. ALKALAI TRADE &
MARKETING, ENDER TEX, ARIGEI MOFET, LYSIS, BRACHA
JOSEPH ROSENBERG, (all from Israel), and DCK CONCESSIONS (of the UK) etc.
Advertising
agency: REUVENI FRIDAN.
Operating from
office premises (owned by parent co.) at the CASTRO headquarters (on a built
area of 4,750 sq. meters, of plot of 2,565 sq. meters, serving the Group) in
31,
Having 1,511
employees serving the CASTRO MODEL Group (had 1,702 employees in the end of
2008).
MEANS
Financial data is
included in the consolidated Balance Sheet of the parent company, CASTRO MODEL LTD., which shows
(subject’s activity comprises a major part of the Group’s operations):
31.12.2009 30.09.2010
ASSETS
Current assets
Cash
and cash equivalents 74,560 30,828
Other
financial assets 182,517 159,363
Customers 75,646 56,762
Other
debtors 15,840 13,460
Stock
93,539 120,626
442,102 381,039
Non current
assets
Investments 17,429 13,982
Fixed
assets, net 110,060 116,687
Other
assets 9,176 9,029
136,665 139,698
578,767 520,737
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LIABILITIES
Current liabilities 139,468 120,015
Long term liabilities 161,275 130,393
Equity 278,024 270,329
578,767 520,737
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Parent company
CASTRO MODEL market value US$ 100 million.
There are 2
charges for unlimited amounts registered on the company's assets, in favor of
Bank Leumi Le’Israel Ltd. and IBM ISRAEL Co.
ANNUAL SALES
·
Subject ended 2006 with a net profit of
·
Subject ended 2007 with a net profit of
·
Subject ended 2008 with a net profit of
·
Subject ended 2009 with a net profit of
CASTRO MODEL LTD.
Consolidated
Statement of Income
Year
ended 31.12
2007 2008 2009
Sales 580,454 601,615 620,527
Gross profit 334,729 357,437 363,995
Operating income 75,360 79,417 85,305
Pre-tax income 66,387 54,152 69,690
Net income 30,592 32,382 52,289
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CASTRO MODEL LTD.
consolidate sales for the first 3 quarters of 2010 were NIS 477,900,000 (9.7% increase
compared to the parallel period in 2009), making a gross profit of NIS
284,529,000, an operating profit of NIS 36,832,000, and a net profit of NIS
17,661,000.
OTHER COMPANIES
CASTRO MODEL
LTD., parent company, also holds:
CASTRO UK LTD.,
100%,
CASTRO SINGAPORE
PTE LTD., 100%, Singapore, non-active, holds 100% of CASTRO ASIA (MACAO
COMMERCIAL OFFSHORE) LTD.
BOLLAG GUGGENHEIM
CASTRO AG RETAIL, 75%,
DIVA FASHION
ACCESSORIES ISRAEL LTD., 50%, operating the fashion accessories chain of the
Group.
BANKERS
Subject is
working with all local bankers, with central branches, mainly with:
Bank Leumi
Le’Israel Ltd., Central Branch (No. 800), Tel Aviv.
Bank Hapoalim
Ltd., Central Branch (No. 600), Tel Aviv.
CHARACTER AND REPUTATION
In March 2007, an
indictment was submitted to the Court against subject by the Ministry of
Industry & Trade, for allegedly violating Consumer Protection Law.
In December 2008
subject, CASTRO MODEL and Mr. Gabi Rotter were convicted
and were fined the total sum of
Apart of the
above (and insignificant legal matters), nothing unfavorable learned.
CASTRO MODEL is
one of the leading fashion chains in
In November 2003
CASTRO Group signed an agreement with German company HEINE GmbH, establishing
CASTRO
In January 2009
CASTRO signed an agreement with HEINE to end the business relationship between
them, paying HEINE € 868,162 for their 51% in CASTRO
In mid 2005,
CASTRO MODEL, jointly with British partner DCK, launched its new sub-chain for
fashionable jewelries and accessories called "Diva", offering some
20,000 items. CASTRO invested several millions in the venture, however in March
2007 appeared reports indicating CASTRO decided to cease investing in the
"Diva" chain, since it fund it to be non-profitable (and may end up
closing the chain).
In March 2010 it
was reported that due to losses of the "Diva" Chain CASTRO closed 2
stores and it intending to close 2 more stores as part of the chain's
reorganization plan. In its Q3 2010 report CASTRO reported it is contemplating
to close the "Diva" chain, however haven't decided yet.
In April 2008 it
was reported that Group opened a flag store in
The global
financial crisis in the 3rd third of 2008 has had its negative
effects on CASTRO MODEL, mainly from unpaid revenues from concessionaires in
In June 2009 it
was reported that since 2004 CASTRO MODEL lost
After
the Russian cossesionere has not met up with his commitments, CASTRO MODEL
signed an agreement with a new cossesionere in October 2009, who also did not
meet up to his obligations, leading to a forteifur of cossesionere’s
collateral. In May 2010 CASTRO MODEL
announced that the Russian concessionaire
has met up with his obligatins. After certain failures to meet obligations
CASTRO MODEL halted its suppling, however in the end of November 2010 it
resumed operations.
In March 2009 it
was reported that CASTRO MODEL invested
In August 2009
CASTRO MODEL purchased 2 store premises on a total area of 311 sq. meters in
Gan Hair Mall, Tel Aviv (a very prestigious location), paying
In
October 2009 it was reported that CASTRO has signed agreements with wholesalers
in
During Q3 2010
CASTRO MODEL reported that a
The
local textile and fashion market is valued at
According to surveys, around 50% and more is women's
fashion. Moreover, 40% of fashion stores in
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
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
According to the Chairman of the Textile and Fashion
division of the Industrialists’ Association, the sales of the textile industry
in 2008 reached NIS 8.4 billion (12% down from 2007, which was similar to
2006), of which some 60% are to the local market and the rest for export. Most exports were
the North American markets (49%). The sector’s 2009 sales expected to decrease
further to
The local industry has been in state of crisis during last
decade in face of amounting import from foreign competitors with cheaper
production costs, forcing streamlining process, plants closure, and mostly
resulting in the shift of textile manufacturing to low labor cost countries.
The number employed in the Textile Industry keeps falling: some 1,600 workers
were dismissals during 2008, and in 2009 over 1,900 employees are expected to
be laid-off. There are around 14,000 employed in the textile sector in some 130
plants.
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
Good for trade
engagements.
Maximum unsecured
credit recommended US$ 2,000,000.
FOREIGN EXCHANGE RATES
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
Rs.44.67 |
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1 |
Rs.69.45 |
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Euro |
1 |
Rs.59.37 |
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.