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Report Date : |
03.12.2012 |
IDENTIFICATION DETAILS
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Name : |
M. G. S. SPORT TRADING LTD. |
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Formerly Known As : |
M.G.S. TEXTILE NDUSTRIES LTD |
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Registered Office : |
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Country : |
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Year of Establishment : |
1986 |
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Com. Reg. No.: |
51-144138-8 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Importers,
Distributors And Marketers of Sportswear, Sporting Goods, Equipment
Accessories, Mainly Footwear And Apparel. |
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No. of Employees : |
1,500 (Group) |
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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 : |
Good |
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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 30th, 2012
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Country Name |
Previous Rating (31.03.2011) |
Current Rating (30.06.2012) |
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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 |
israel - ECONOMIC OVERVIEW
Israel has a
technologically advanced market economy. It depends on imports of crude oil,
grains, raw materials, and military equipment. Cut diamonds, high-technology equipment,
and agricultural products (fruits and vegetables) are the leading exports.
Israel usually posts sizable trade deficits, which are covered by tourism and
other service exports, as well as significant foreign investment inflows. The
global financial crisis of 2008-09 spurred a brief recession in Israel, but the
country entered the crisis with solid fundamentals - following years of prudent
fiscal policy and a resilient banking sector. The economy has recovered better
than most advanced, comparably sized economies. In 2010, Israel formally
acceded to the OECD. Natural gasfields discovered off Israel's coast during the
past two years have brightened Israel's energy security outlook. The Leviathan
field was one of the world's largest offshore natural gas finds this past
decade. In mid-2011, public protests arose around income inequality and rising
housing and commodity prices. The government formed committees to address some
of the grievances but has maintained that it will not engage in deficit spending
to satisfy populist demands.
Source
: CIA
M. G. S. SPORT TRADING LTD.
6 Hamachtesh Street
Lev Magor Building
Industrial Zone
HOLON 5881003, ISRAEL
Telephone 972 3 500 51 00; 559 97 22
Fax 972 3 559 97 27
Originally
established in 1986 as a non-registered business.
Converted into a private limited company incorporated as per file No. 51-144138-8 on the 02.01.1990 under the name M.G.S. TEXTILE NDUSTRIES LTD. On 24.01.1994 name was changed to present one.
On 01.03.2008,
subject completed the acquisition from the FISHMAN Group the
MEGA SPORT chain, a local leading sporting goods retail chain, for US$ 20
million.
Authorized share capital
NIS 400,000.00, divided into: - 400,000 ordinary shares of NIS 1.00 each, of
which 1,000 shares amounting to NIS 1,000.00 were issued.
1.
M. G. S. INTERNATIONAL LTD., a holding company,
owned by Gideon Mouliev,
2.
Shalom Mouliev, holding one
single share.
Gideon Mouliev
Importers,
distributors and marketers of sportswear, sporting goods, equipment
accessories, mainly footwear and apparel. Also operating retail chain stores for
selling subject's goods, as well as by other local suppliers.
M. G. S. Group
operates 51 sports apparel and goods retail stores throughout the country, under the names 'Mega Sport' chain
(37 stores + 7 surplus), 'United Sport' (2 shops) 'Elital' (3 shops), 1
'Skechers' shop and 1 duty-free shop (in partnership).
Sales are to
retail chain stores, some 550 sporting goods stores, as well as to the Group's
own chain stores. Among clients are leading retail chains and shops: NEW
HAMASHBIR LAZARHAN, H&O FASHION, SAKAL SPORT, etc.
Advertizing
agency: SHIMONI FINKELSTEIN.
Sole local
representatives and distributors of (among many):
ARENA, of
Switzerland,
DIADORA, KAPPA, REPLAY, SUPERGA, ARENA, all of Italy,
CONVERSE/ALLSTAR, EWING, CHAMPION, SKECHERS, OP, HI-TEC, EVERLAST, MERRELL, MARK ECKO, ZOO YORK, ASICS, all of the U.S.A.
ROYAL ELASTICS, of
Australia.
Operating from
rented premises, the Group's headquarters, on an area of well over 1,000 sq.
meters, in 6 Hamachtesh Street, Lev Magor Building, Industrial Zone, Holon and
rented warehouses in Kanot Village.
M.G.S. Group
operates from 391 retail stores, all rented, spread countrywide and span on an
average area of 600 sq. meters per store.
Having some 1,500
employees serving M.G.S. Group.
In March 2008,
subject completed the acquisition of the activities of MEGAMART SPORTING GOODS LTD. ("Mega Sport" chain), in consideration
of circa US$ 20,000,000.
Other financial
data not forthcoming, however known to be solid.
According to a
report from January 2011 Group's 2011 advertizing budget is NIS 4 million.
In January 2009
ADIDAS purchased 51% of LIFE SPORT LTD, a 50% subsidiary of subject, for the
estimated sum of NIS 30-40 million (see more CHARACTER).
There are 59
charges for unlimited amounts registered on the company's assets (financial
assets, fixed assets and vehicles), in favor of Union Bank of Israel Ltd., Bank
Leumi Le’Israel Ltd., Bank Hapoalim Ltd. and companies (last charge placed in
June 2011, and 14 charges before in November 2010).
Sales figures not
disclosed, however it is known that subject's annual sales increased
significantly since, prior to the MEGAMART transaction.
MEGAMART 2007 sales reported to be of circa NIS 250
million, and it will be added to subject's sales.
According to media
reports, Group’s annual sales are several NIS hundred million (NIS 300 million
in some reports and over NIS 500 million in others).
According to a
report from October 2011, DIADORA brand's sales in Israel are NIS 90 million.
JAMES RICHARDSON -
M.G.S LIMITED PARTNERSHIP, 49%, operates a duty-free shop in the Ben-Gurion
Intl. Airport for sports goods.
ELITAL SPORT
LIMITED PARTNERSHIP, operating a surplus sports and leisure footwear store.
Also in the Group:
M. G. S.
INTERNATIONAL LTD., a holding company.
LIFE SPORT LTD.,
24.5%, local exclusive concessionaires of "Adidas"
and “Reebok”, operating some 25 shops,
A.T.I.
LTD.,
INTER
JEANS LTD., 50% owned by Gideon Mouliev and Shalom
Mouliev, importers and marketers of ladies and men fashion wear, shoes and
accessories, specializing in jeans wear. Also perating a retail stores chain (a
total of 22 stores), selling goods under brand "Replay", as part of
the exclusive concession from REPLAY, of Italy and "NYou Madden" as
part of exclusive concession of STEVE MADDEN
MOULAIEV GIDEON
LTD, operating 9 shops for sports goods in the Beer Sheva District under style
"Aluf Hasport".
Union Bank of Israel Ltd., Main Branch (No. 063), Tel Aviv, account No.
481400/50.
Bank Leumi
Le’Israel Ltd., Hachashmonaim Business Branch (No. 817), Tel Aviv, account No.
246600/53.
A check with the
Central Banks' data base did not reveal negative information on subject’s a/m
bank accounts.
Bank Hapoalim
Ltd., Lev Ha’ir Beer Sheva Branch (No. 517), Beer Sheva.
Nothing
unfavorable learned.
Despite our efforts, we were unable to speak with subject's officials,
as they were always unavailable. We sent a fax and left messages which so far
remain unanswered.
In August 2007,
subject signed an agreement with Eliezer Fishman, to acquire the activities of MEGAMART SPORTING GOODS LTD., which operates Israel's leading sporting goods
retail chain, "Mega Sport", for reported sum of US$ 21 million. The transaction included also the wholesale activities, as well as the sole
concessions of MEGAMART, e.g. Kappa, Champion, Everlast, Merrell, etc. It was
reported that the “Sacony” concession was not part of the deal.
MEGAMART operated since 1996.
The Anti-Trust
Commissioner approved the transaction in February 2008 after certain
impediments, including an instruction to sell its shops for sports goods
"Aluf Hasport", operated under affiliate MOULAIEV GIDEON LTD. in the
Beer Sheva District. The Commissioner also conditioned its approval, saying
that subject will have to get the approval for any further concessions of
international brands in the future, in order to avoid unfair competition using
subject's dominance.
The acquisition
turned subject into the leading player in the market for sporting goods. “The
“Mega Sport” chain is the largest sporting and leisure chain in Israel.
In 2008 subject
also acquired ELITAL Sport.
In May 2008, the Tel Aviv District Court issued a
temporary injunction, disallowing subject from selling footware designs that
resemble the "Crocs" brand, due to fear of misleading the public.
In
Seprember 2008 it was reported that the handling of the "Reebok" is
about to pass to LIFE SPORT ("REEBOK” was bought by
the ADIDAS Group).
In
January 2009 ADIDAS Group of Germany purchased control (51%) of “ADIDAS
ISRAEL”, which is operated by subject’s subsidiary LIFE SPORT LTD., for a sum of NIS 30-40 million. LIFE SPORT holds the local exclusive concession for “Adidas” since 2003, when ADIDAS sold it to
LIFE SPORT. Subject’s Group managed to promote the “Adidas” brand to a market
share of over 20% in the sporting goods branch.
In
January 2009 INTER JEANS bought the concession for the
"Steve Madden" shoes and the "Replay"
shoe brand from Yosi Ashkenazi, for US$ 2 million.
In July 2009 it was reported that ADIDAS ISRAEL is
opening an "Adidas Originals" shop investing NIS 2 million.
In the 2nd half of 2009 it was repported
that Group is openning a "Skechers" shop in Tel Aviv with an
investment of US$ 250,000 and a "Steve Madden" shop in Ashdod with an
investment of NIS 500,000.
In May 2010 it was reported that subsidiary ELITAL is
openning a new sports footwear surplus store in G Center, the new shopping mall
in Rishon Le-Zion, with investment of NIS 3 million.
In June 2010 it was reported that “Mega Sport” chain is
launching a new shop in “One” Compound, a shopping center in Beer Sheva, with
investment of NIS 1.5 million. The new store lies on an area of 550 sq. meters.
Also it was reported that Group will open a specialized
running gear shop under the name 'Mega Pro' and will invest NIS 3 million in 6
branches.
In January 2011 it was reported that Group will open 4
more Mega Sport retail stores, and re-design the store in Jerusalem, investing NIS
2.3 million in the move.
In August 2011 it was reported that Mega Sport is opening 2 retail stores with a total investment of
some NIS 1 million.
It February 2011it was reported that subject will
invest NIS 3 million in an advertising campaign for the Diadora brand, via
Advertising Agency HABAILINIM.
In August 2011 it was reported that Group will invest
NIS 2.8 million in clothing sponsorship of Israel's top football league (Winner
League) to 5 teams, using the brands "Diadora" and "Kappa".
In October 2011 subject (together with JAMES
RICHARDSON) re-won the tender to operate the Duty Free sports shop for the next
9.5 years. In January 2012 store opened after renovations, with reported
investment of NIS 2.5 million.
In January 2012 it was reported that subect's ELITAL is opening a new shop in Yoqneam, with an investment
of NIS 2.5 million.
In Audust 2012 it was reported that subject is opening
2 Mega Sport shops .
In November 2012 it was reported that the local
concessionairs of BENETTON are negotiating with Gideon Mouliev to enter as
a partner in the local cocession.
The local sporting
goods market, which includes footwear, apparel and equipment, was estimated at
over 2 billion per annum, as of 2012.
Notwithstanding the lack of updated details from subject's officials,
considered good for trade engagements.
Note: Since the beginning of 2012 Israel Post
started using a new area code method of 7 digits (the old method of 5 digits
will still be valid till end of 2012).
FOREIGN EXCHANGE RATES
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
Rs.54.52 |
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1 |
Rs.87.48 |
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Euro |
1 |
Rs.70.89 |
INFORMATION DETAILS
|
Report
Prepared by : |
SHG |
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.