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MIRA INFORM REPORT
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Report Date : |
06.07.2011 |
IDENTIFICATION DETAILS
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Name : |
H & O FASHION CHAINS (2003) LTD. |
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Formerly Known As : |
TAG WOMAN LTD |
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Registered Office : |
Hutzot Shefayim, Shefayim 60990 |
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Country : |
Israel |
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Date of Incorporation : |
22.12.2003 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Manufacturers
and marketers of women fashion
and accessories, operating retail chain stores |
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
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Country Name |
Previous Rating (31.12.2010) |
Current Rating (31.03.2011) |
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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
H & O FASHION
CHAINS (2003) LTD.
Telephone 972 9 971 30 03;
971 30 33
Fax 972
9 971 30 06
Hutzot Shefayim
SHEFAYIM 60990-ISRAEL
HISTORY & LEGAL FORMATION
A private limited
company, incorporated as per file No. 51-348094-7 on the 22.12.2003.
Originally registered
under the name TAG WOMAN LTD., which changed to the present name on 24.06.2009.
SHARE CAPITAL
Authorized share capital NIS 10,039,100.00, divided into -
10,039,100 ordinary shares of
NIS 1.00 each,
of which
10,000,000 shares amounting to NIS 10,000,000.00 were issued.
SHAREHOLDERS
Subject is fully
owned by H & O FASHION LTD., fully owned by AVRAHAM LIVNAT LTD., owned by
Avraham (Bondi) Livnat & family.
AVRAHAM LIVNAT
gained full control over H & O since September 2009, after acquiring the
shares (50%) of its former partners B. GAON RETAIL & TRADING LTD. (based on
a company value for of NIS 40-NIS 60 million).
In January 2007 H
& O FASHION completed the acquisition of control in subject (63.25%) from
subject's former other shareholders (Ilan Levy, Liran Drey, Sagiv Halevi and
Eli Guetta, also the founders of subject), in consideration of NIS 14.5 million in cash. In June 2008, H &
O realized an option (PUT option) given and acquired the rest of subject’s
shares (36.75%) from subject’s founders, in consideration of NIS 8.31 million.
DIRECTORS
1. Amiaz Sagis, Chairman of H & O FASHION,
2. Yehezkel Dovrat,
3. Yair Assahel,
4. Shaul Ben Zeev,
5. Eliaz Poleg.
GENERAL MANAGER
Nitzan Hadas (also General Manager of parent H & O FASHION)
BUSINESS
Manufacturers and
marketers of women fashion and accessories, operating retail chain stores under
the brand "TagWoman" countrywide.
Subject targets
girls and young ladies segment (mainly ages 15-35).
TagWoman chain
includes some 10 shops, spread mostly in shopping malls (had some 30 branches
in its peak in 2008). In addition, H & O Group sells subject brand in some
17 of its retail chain stores.
Manufacturing is
carried out via subcontractors.
Subject purchases
raw materials for production from local suppliers and finished goods are
purchased from both foreign and local suppliers.
Among local
suppliers: JAMTEX MODE.
Operating from
rented offices, part of H & O FASHION Group's headquarters, on an area of
800 sq. meters, in Hutzot Shefayim, Kibbutz Shefayim, and from some 10 branches
nationwide.
Having
1,200 employees serving the H & O Group (as of 2010), of which several tens
employees in subject.
MEANS
Current financial data is not forthcoming,
however subject is known to be inflicting losses to the Group. Yet subject is
backed by parent company H & O FASHION LTD., itself enjoying the
financially solid AVRAHAM LIVNAT Group.
Subject’s B/S totaled NIS 23,708,000 as of
30.06.2008 (current assets NIS 12,282,000 and net fixed assets of NIS 10,643,000).
Current liabilities were NIS 37,658,000 and equity in deficit of
14,471,000).
There are 21 charges for unlimited amounts
registered on the company's assets, in favor of Israel Discount Bank Ltd., Bank Leumi
Le'Israel Ltd., Bank Hapoalim Ltd. and Mizrahi Tefahot Bank Ltd.
REVENUES
2007 sales were
NIS 36,089,000, making a gross profit of NIS 22,602,000, an operating loss of
NIS 4,819,000, ending with a net loss of NIS 7,063,000.
First half of
2008 sales were NIS 17,995,000, making a gross profit of NIS 10,047,000, an operating loss of
NIS 4,833,000, ending with a net loss of NIS 5,605,000.
Subject's later
sales figures not forthcoming, known to be losing (in 2010).
According to
media reports in 2010 and 2010 H & O FASHION Group has consolidated sales
of NIS 500,000,000, and profitable.
OTHER COMPANIES
H & O FASHION
LTD., importers, designers, marketers and retailers of apparel and fashion
products, including handbags, jewelry, watches and other fashion accessories,
as well as footwear, toiletries and cosmetics, household products and home
textile. H&O Group operates 34 branches countrywide.
The Livnat Family
also, via holding company AVRAHAM LIVNAT LTD. (established in 1972) has
holdings in many other companies, via (among others):
TAAVURA Group: Mainly TAAVURA HOLDINGS LTD., which
operates in the following lines of activities:
1.
Road haulage services, dealing in all sorts of
cargo (bulk, cars, heavy duty equipment, raw materials, etc.).
2.
Infrastructure, mining, earth and marine works.
3.
A holding company for the TAAVURA Group, which
deals in automobiles, infrastructure, heavy-duty equipment and machinery, tires, public transportation, environment, etc.
TAAVURA
consolidated 2010 sales were NIS 2,176 million.
Amon
its many holdings:
MAMAN
Group: MAMAN- CARGO TERMINALS & HANDLING LTD., 68.2%, established in 1974 and publicly traded (TASE), deals
in management and operation cargo rterminal authorized for all import and
export cargo.
TASHTIT CONSTR
UNIVERSAL TRACKS
ISRAEL LTD. (U.T.I.), importers and marketers of ISUZU trucks in Israel, 50%,
YOZMA GALIL
HOLDINGS (1982) LTD., cement and raw material suppliers.
(See more on the
Group in CHARACTER).
BANKERS
· Mizrahi Tefahot Bank Ltd., Beit El Al Branch (No. 407), Tel Aviv.
· Bank Leumi Le’Israel Ltd.,
·
Israel
Discount Bank Ltd., branches data not forthcoming.
CHARACTER AND REPUTATION
Apart of the
financial status, nothing unfavorable learned.
Subject's CFO,
who is in charge of providing data on subject, is currently out of office (a convention)
and due back in the coming days. We shall contact him and update you
accordingly.
When
acquired by H & O FASHION, subject carried hefty
financial troubles.
H & O FASHION
excersized a streamlining process in subject and
recovery plan upon its acquisition. In February 2010 it was reported that
during the last year H&O Group closed down 10 of TagWoman 32 branches. Due
to fierce competition in the local market and the slow down in the fashion
sector in 2009 and 2010, subject continued to inflict losses, and in May 2011
it was reported that in recent months 8 more losing branches were closed down,
plus another one in Modi'in to be closed, leaving subject with some 10 shops.
In mid 2009 it was decided to sell subject's brand within H & O branches, thus
reaching annual sales of NIS 15 million.
In
mid 2010 it was reported on NIS 1 milion investment in promotion of subject's
brand for summer 2010.
In
May 2011, H & O reported that they expect that the stremlining measures and
shops closing will lead subject to balance till the year's end.
Parent company H
& O FASHION LTD., established in 1992 (continuing activities founded many
years earlier) is one of the leading local fashion retail chains.
Avraham (Bondi) Livnat
is a well-known and among the leading and most powerful local businessmen. TAAVURA Group, which he founded, is the largest
local transporters of heavy road haulage. The Group has many other holdings,
including 80% in CARMEN MANAGEMENT AND ASSETS (1997) LTD., which has some 20%
stake in the publicly traded company EQUITAL LTD., dealing in real estate and
oil and natural gas exploration. It includes the part in the rights in what is
considered one of the largest natural gas discoveries in the world ever, when
in 2009 and 2010 huge resources were discovered in the “Tamar” and “Dalit”
prospects, offshore Haifa, of over 200 billion CM, valued many US$ billions.
In addition, Bondi is also a shareholder (some
13%) in one of Israel's largest and most influential concerns, I.D.B Concern (controlled by Nochi Dankner), which controls the CLAL
Group, KOOR Group, DISCOUNT INVESTMENTS, ELRON Groups, operating and investing
in all kind of sectors in Israel and abroad, including trade and commerce,
finance and insurance, real estate, telecommunications and media, hi-tech and
other industries. Among corporations are CELLCOM ISRAEL, one of the 3 leading
cellular operators, NETVISION, a leading IP services provider, SHUFERSAL
largest supermarket chain, NESHER CEMENT local sole cement manufacturer,
MAKHTESHIM AGAN, a world leading agro-chemical concern, HADERA PAPER, leading
local paper group, PROPERTY & BUILDING CORP., with yielding real estate
properties, CLAL INSURANCE Group, one of Israel’s largest insurance groups, and
many more. In addition I.D.B. concern holds shares 3.21% in SWISS BANK and 50%
in a plot in Las Vegas Strip designed for the erection of a huge Plaza Casino
project.
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
Despite the apparent negative financial
situation of subject, being part of H & O FASHION Group and LIVNAT Group,
considered good for trade engagements.
FOREIGN EXCHANGE RATES
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
Rs.44.50 |
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UK Pound |
1 |
Rs.71.25 |
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Euro |
1 |
Rs.64.40 |
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.