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Report Date : |
11.09.2012 |
IDENTIFICATION DETAILS
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Name : |
FOX-WIZEL LTD. |
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Formerly Known As : |
WIESEL TEXTILE MARKETING LTD |
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Registered Office : |
P.O. Box 76, Ben Gurion Airport (7015002), 6 Hermon Street, Fox House, Airport City Compound, Airport Lod 7010000 |
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Country : |
Israel |
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Financials (as on) : |
30.06.2012 |
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Year of Establishment : |
1990 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Designers, importers, manufacturers, marketers, exporters and
retailers of clothes and fashion accessories |
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No. of Employees : |
1,950 employees |
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 : |
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 – March 31st, 2012
|
Country Name |
Previous Rating (31.12.2011) |
Current Rating (31.03.2012) |
|
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.
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Source : CIA |
FOX-WIZEL LTD.
Telephone 972 3 905 01 00
Fax 972 3 905 02 06; 905 02 00
P.O. Box 76, Ben Gurion Airport (7015002)
6 Hermon Street
Fox House
AirPort City Compound
AIRPORT LOD 7010000 ISRAEL
Originally incorporated as a sole proprietorship in 1990.
Converted into a private limited company, registered as per file No.
51-215760-3 on the 01.06.1995.
Originally registered
under the name WIESEL TEXTILE MARKETING LTD., which changed to the present name
on 23.01.2002.
On 15.04.2002
published a prospectus offering shares to the public on the Tel Aviv Stock
Exchange (raising a sum of NIS 48 million) and on 1.8.2002 converted into a
public limited company (Registration number remain as before).
Authorized share
capital NIS 150,000.00, divided into -
15,000,000
ordinary shares of NIS 0.01 each,
of which
12,872,799 shares amounting to NIS 128,727.99 were issued.
1.
WIESEL HOLDINGS A.I.H LTD., 26.2%, equally owned by
Harel Eliezer Wiesel, Iftach Wiesel and Assaf Wiesel,
2.
Avraham Dov Fuchs (through TRICO FOX LTD.), 25.8%,
3.
Lev Levayev (through MEMORAND MANAGEMENT (1998)
LTD.), 19.7%,
4.
CLAL HOLDINGS, 7.8%, an institutional investor,
5.
Shares are also traded on the Tel Aviv Stock
Exchange.
1.
Avraham Zeldman, Chairman
2.
Harel Wiesel, General Manager,
3.
Avraham Dov Fuchs,
4.
Ms. Chagit Sofiev-Leviev,
5.
Israel Maimon,
6.
Alon Cohen,
7.
Ms. Osnat Ronen.
Designers,
importers, manufacturers, marketers, exporters and retailers of clothes and
fashion accessories under the brand name “Fox”, under 4 categories: "Fox
Men", "Fox Women", "Fox Kids" and "Fox
Baby"., as well as stores under the brand name "American Eagle".
Subject also imports and marketers household product under the name "Fox
Home".
Also selling to
wholesalers, shops and institutional bodies, as well as to subject’s
concessionaires overseas.
Manufacturing is
carried out through some 20 suppliers and subcontractors abroad (though working
mostly with 2 large subcontractors). Until 2008 subject operated also its own
manufacturing line in Israel, but decided to close it down.
Major foreign
supplier: WINGSRICH, Hong Kong/ China.
Operating 152
branches in Israel of the "Fox" brands, 12 branches of the
"American Eagle" brand and 19 branches of the "Fox Home"
brand.
In addition,
operating via concessionaires through 228 branches and Points of Sale abroad
under the name "Fox" in 14 countries: Singapore, Georgia, Bulgaria,
Croatia, Romania, Thailand, Panama, The Philippines, Moldavia, Puerto Rico,
Cyprus, Kazakhstan, Serbia, Mongolia and Russia. Sales are also via
distributors in Russia, Kazakhstan, Panama, Georgia and Germany (internet).
Sales in Russia
are also via subsidiary, operating 8 stores.
Subject, via its
subsidiaries, also marketers clothes and fashion accessories under the brand
name “Sacks” – 13 branches, "Billabong" – 28 branches and home care
and body care products under the name "Lalin" – 73 branches (as well
as 13 "Lalin" concessionaire stores abroad).
Advertising
agencies: ZARMON-GOLDMAN (main), SHALMOR-AVIHAI-AVNON
Operating from
rented premises (headquarters and offices, warehouse and logistics center) on
an area of 15,680 sq. meters (12,600 sq. meters built), in 6 Hermon Street,
Airport City (near Ben Gurion Airport, Lod), and from retail stores nationwide
(as of end of 2010 rents 151 active shops, situated mainly in shopping malls
and centers).
Landlord in Airport
City: TNUVOT KESHET.
Having some 1,950
employees in subject (had 1,727 employees at the end of 2010) and further 944
employees in subsidiaries.
In June 2006
subject issued bonds to the public through the Tel Aviv Stock Exchange, raising
a sum of NIS 70 million. In December 2008 subject announced on self purchase of
its bonds (issued May 2006) up to total of NIS 10 million.
Consolidated B/S
shows:
NIS
(thousands)
ASSETS 31.12.2011 30.06.2012
Current assets
Cash
and cash equivalents 51,476 47,816
Sort
term investments & financial assets 137,797 112,253
Customers 113,317 104,446
Other
debtors 24,014 30,470
Stock 143,888 188,899
470,492 483,884
Non-current assets
Investments in affiliated companies 4,879 5,034
Financial assets 66,176 65,373
Fixed assets (net) 138,763 161,543
Goodwill and intangible assets 57,076 56,018
Other non-current assets 16,490 16,341
283,384 304,309
753,876 788,193
======= =======
LIABILITIES
Current liabilities 180,479 206,291
Non-current liabilities 162,671 156,172
Equity 410,726 425,730
753,876 788,193
======= =======
Current market
value US$ 119.5 million.
In August 2012
subject's bonds rating was upgraded to A1 (from A2).
There are 11 charges
for unlimited amounts, as well as 2 charges for the total sum of US$
16,100,000.00 registered on the company's assets, in favor of Bank Leumi
Le’Israel Ltd., HSBC Bank Plc. and IBM ISRAEL (last charge placed June 2012,
prior charge placed February 2008).
Consolidated
Statement of Income
NIS
(thousands)
Year
ended in 31.12
2009 2010 2011
Sales 593,305 727,146 819,124
Gross profit 299,765 416,307 476,546
Operating income 12,206 86,265 104,824
Pre-tax income 31,859 76,297 100,287
Net income 30,318 58,080 75,465
======= ======= =======
Consolidated first 6 months sales of 2012 were NIS
486,793,000 (33.5% increase compared to the parallel period in 2011), making a
gross profit of
NIS 284,192,000, an operating income of NIS 52,768,000,
making a net profit of NIS 37,299,000.
FOX - WIESEL CHINA
LTD., 100%, a subsidiary in China,
FOX - WIESEL
CYPRUS LTD., 100%, Cyprus, operating branches in Europe.
FOX-LEVIEV LLC,
50%, Russia, operating Group's stores in Russia.
BILLY HOUSE LTD.
("Billabong Israel"), 50%, agents and marketers of Billabong surfing
apparel and goods. Operating 28 chain stores.
LALIN CANDLES AND
SOAPS LTD., 50% in each, manufacturers and marketers of home care and body care
products and accessories, including soaps, candles, body care items,
toiletries, ambiance products, etc. Operating 73 chain stores in Israel. Fully
owns LALIN INTERNATIONAL LTD.
A.H. FASHION
MANUFACTURE AND MARKETING 3020 LTD. (known as "Sack's"), 50%.
Operating 13 chain stores.
FOX WIZEL (BVI)
LTD., 100%.
WIESEL REAL ESTATE
A.I.H. (1999) LTD., sister company.
TRICO FOX LTD.,
leasers of real estate.
· Bank Leumi Le’Israel Ltd., Allenby Business Branch (No. 802), Tel Aviv, account No. 60600/34.
HSBC
Bank Plc., Main Branch (No. 101), Tel Aviv, account No. 500494.
A check with the Central Banks' database did not reveal anything
detrimental regarding subject a/m accounts.
In May 2007, the
Securities Authority raided on subject's offices, following suspicious of
violating securities' rules by using "inside information" for making
profits. Nothing was published on this affair since.
Note: subject itself
does not address this matter since its 2008 annual report.
Currently, 2
motions were submitted to the court for the approval as a class action lawsuit
against LALIN (February 2010, for NIS 109 million) and BILLY HOUSE (November
2011, for NIS 29.4 million) on the ground of mislabeling (both claims). It
should be noted that the procedure for such claims to be approved are usually
long and mostly eventually turned down, as so is estimated by subject.
Apart from that,
nothing unfavorable learned.
FOX – WIESEL is a
leading vendor in fashion wear for women, men and kids in Israel, with
impressive growth rates in recent years, including expansion to overseas
markets.
In
September 2004, subject signed a deal to grant MEMORAND MANAGEMENT (1998)
LTD., a company owned by businessman Lev
Leviev, a license to open stores in Russia under
subject’s brand. MEMORAND was also allocated 10% in subject and further options
for another 10%, which were later fully realised. Lev Leviev controls the AFRICA ISRAEL Group, which is involved
in real estate, energy, hotels, industry & hi-tech and many other
investments in Israel and abroad. It should be mentioned that the AFRICA
ISRAEL Group was adversely hit by the
global economic crisis, accumulating huge losses (mainly due to its real estate
holdings in Russia and the USA) which forced them to reach a settlement with
its creditors and bonds holders in December
A
new company FOX-LEVIEV LLC was established by subject
and MEMORAND in Russia, and since 2006 8 stores were opened.
In
August 2005, subject signed a deal to give HE MIAN of China a license to open
stores in China under subject’s brand. In September 2005 subject established a
new subsidiary in China.
In
2005 5 fashion stores under subject’s name were openned in Italy, however were
closed down by May 2008, as they did not prove to be profitable.
The
store in Germany, opened in June 2006, was also closed.
Since 2005/6
subject (via concessionaires) also began expansion into the Eastern and Central
European markets, starting with Bulgaria and Romania, as well as to the Far
East (Singapore, Thailand).
Since 2007/8 also
expanded to Panama. In the 4th quarter
of 2008 new FOX retai stores were opened in Canada and furthre planned to be
launched during 2009. Subject signed concession agreement with Canadian SHERSON
Group. In September 2009 the Canadian activities were closed.
In July 2009
subject opened a store in Puerto Rico. The Group intends to open branches in
Serbia and other countries as well.
In October 2006
subject acquired 50% of BILLY HOUSE LTD. ("Billabong Israel"), agents
and marketers of "Billabong" and "Rif" surfing apparel and
goods in Israel since
In March 2007,
subject completed the acquisition of 50% of LALIN CANDLES AND SOAPS LTD. and
LALIN INTERNATIONAL LTD., manufacturers and marketers of candles and soaps, in
consideration of NIS 12.87 million, in cash.
In June 2007,
subject acquired 50% of fashion retail store in chain (then, 4 boutiques)
Sack's (company name is A.H. FASHION MANUFACTURE AND MARKETING 3020 LTD.), for
NIS 24.6 million. Sack's manufactures and markets women fashion to wholesalers,
on top of the retail stores.
In mid 2007 subject
launched streamlining measures in order to improve the financial status,
including closing down non-profitable shops abroad in Australia, Germany and
Italy.
In view of the
economic slow-down in the local market during 2009-2010, especially in the fashion
retail business, subject took further measures designed to cut costs. As part
of the re-organization it erased its sub-chain brands Fox-Kids, Fox-Man and
Fox-Baby and unified all under a new logo design.
In November 2009 it was reported that subject is launching
a new line of maternity clothing, which will operate under the brand name
"Fox Maternity".
In
2010 subject entered a new segment under the brand name “Fox Home” for home
textile and accessories. The household products market is estimated at NIS 1
billion annually and is considered saturated and highly competitive. Total
investment in 2010-2011 in this segment was estimated at NIS 22 million.
Subject’s concessionaire in Romania and Moldova S.C. CORSA
has encountered cash flow problems due to the global financial crisis that
drove demands down and its wide expansion in its markets that were followed by
large investments (41 branches in Romania). As of Q2 2012 the concessionaire
has debts of NIS 3.2 million to subject. Subject has been operating to assist
the concessionaire and lower its exposure, and has made the necessary
deductions in its financial statements.
In March 2010 LALIN signed an agremment with BRAND EMPIRE
to open 30 LALIN store in the UK. However during 2011 the concessionaire did not
meet his obligations, and in June 2011 subject reported it terminated the
agreement with the concessionaire, who will pay FOX £ 200,000.
During 2010
subject signed a line of agreements with foreign concessionaires, in the USA
(for California region), in Virgin Islands (for The Caribbean) and in Japan.
Each concessionaire committed to open a number of branches (not less than 18 in
California, 15 in The Caribbean and 30 branches in Japan) within the next
several years, each with investment of around US$ 2 million.
All
concessionaires have already opened their first branches in their territories.
In July 2010 subject signed an an agreement with American
AEO MANAGEMENT CO. in which subject will be the sole local representatives of
"American Eagle" and "Aerie" brands. Subject intends to open 15 retail chain under
the "American Eagle" brand. This brand was the main contributor to
the Group's growth in sales in the 2ndQ 2012 of 35.5%.
In January 2012 it was reported the subject intends to
open a flag oncept retail store called "Fox House", on an area of
7,000 sq. meters, with all of the Group's brands.
In July 2012 subject reported it is negotiating to receive
the local representation of the "New Yorker" brand. Innitial checks
of subject's financial and logistic abilities were successful.
According to the Central Bureau of Statistics (CBS), import of
Clothing and Footwear in 2011 kept the rising trend from 2010: import rose by
close to 19%, after rising 13.4% in 2010 from 2009, summing up to US$ 1,707.3
million (in 2009 the local market experienced a slow-down). 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.
Despite the fears
due to the slow-down trend in the local economy, mainly since mid 2011, sales
by the local fashion –clothing and footwear- branch in 2011 witnessed a growth.
The income of fashion chains (which covers 1,350 shops, the major chunk of
fashion sales in Israel) summed up to NIS 4.52 billion, representing a 5.7%
rise from 2010 in money terms. Sales during the year characterized in ups and
downs, though eventually they came higher than 2010, a year which was better
than 2009, when the branch suffered from slow-down (coupled with the general
local economic environment) and overall sales indicators were negative. 2010 sales were only marginally positive. Sales have
been also influenced by the entrnce of new international fashion players
to the already highly competitive local market (GAP, H&M in 2009/2010,
Forever 21 in 2011).
However, according to sources in the local fashion branch, in recent period the
branch re-entered
stagnation, and drop in sales. It is explained by several factors, including
the present slow-down in local economy, and the fierce competition where the
entrance of the strong international chains are dragging prices down but do not
bring to expansion of the fashion market. .
Sales by local Textile, Clothing and Fashion Industries
experienced decrease in sales over the last couple of years. The output by the
local Textile and Clothing industries in 2009 fell down by 13% from 2008. Some 60% of the textile industry production is sold in the
local market and the rest for export. Most exports were the North American
markets (some 50%), and the industries suffered from the global economic
crisis, mainly in the USA, as well as the slow-down in local market. In 2010
sales for export of the Textile, Clothing & Leather industries improved
just slightly, with 3.5% increase from 2009, however in 2011 fell again by 6.6%
(mainly due to global markets weakness) reaching US$ 858.7 million.
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.
There are around 14,000 employed in the textile sector in some 130 plants. In
order to deal with the situation, the local textile industry diverted mainly to
advanced technologies production, niches and design aspects.
According
to the Central Bureau of Statistics (CBS), private consumption expenditure by
Israeli households in 2011 in clothing, footwear and personal effects rose by
mere 1.3% from 2010, after a 9.5% increase from 2009.
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
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.55.34 |
|
UK Pound |
1 |
Rs.88.50 |
|
Euro |
1 |
Rs.70.74 |
INFORMATION DETAILS
|
Report Prepared
by : |
MNL |
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 |
|
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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.