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Report Date : |
02.10.2013 |
IDENTIFICATION DETAILS
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Name : |
CASTRO MODEL LTD. |
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Registered Office : |
31 Ort Israel Street, Industrial Zone, Bat Yam 5959042 |
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Country : |
Israel |
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Financials (as on) : |
30.06.2013 |
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Year of Establishments: |
1947 |
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Legal Form : |
Public Limited Liability Company |
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Line of Business : |
Designers,
importers, manufacturers (via subcontractors in Israel and abroad), exporters
and marketers of women and men wearing apparel, footwear and fashion
accessories (belts, handbags, wallets) |
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No. of Employees : |
Having 1,140 employees serving CASTRO MODEL Group
(had 1,618 employees in the end of 2011). |
RATING & COMMENTS
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MIRA’s Rating : |
A |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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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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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 – March 31st, 2013
|
Country Name |
Previous Rating (31.12.2012) |
Current Rating (31.03.2013) |
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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. Its major imports
include crude oil, grains, raw materials, and military equipment. Cut diamonds,
high-technology equipment, and pharmaceuticals are among 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. Israel's economy also has weathered the Arab Spring
because strong trade ties outside the Middle East have insulated the economy
from spillover effects. 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, and production from the Tama field is expected to meet all of
Israel''s natural gas demand beginning mid-2013. 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 |
CASTRO MODEL LTD.
Telephone 972 3 555 45
55
Fax 972 3 555
45 54
31 Ort Israel Street
Industrial Zone
BAT YAM 5959042 ISRAEL
Originally
established as a non-registered firm in 1947.
Converted into a private limited company and
registered as such as per file No. 51-065215-9 on the 26.06.1973.
Converted into a public limited liability
company and registered as such as per file No. 52-003764-9 on the 30.06.1992.
Subject published a prospectus offering shares to the public and since 1992
traded on the Tal Aviv Stock Exchange.
Following a
re-organization in the CASTRO MODEL Group, as of 01.01.2007 all of CASTRO MEN
(1997) LTD.'s assets and activities were transferred to CASTRO MARKETING 1985
LTD., a fully owned subsidiary of subject.
CASTRO MEN (1997)
LTD. was liquidated ("Liquidated
Due to Merger").
On the 08.11.2012 wholly-owned subsidiary
CASTRO MARKETING (1985) LTD. (now "Liquidated Due to Merger"), was
fully merged into subject.
Authorized share
capital NIS 10,000,000.00, divided into -
10,000,000
ordinary shares of NIS 1.00 each,
of which 5,787,000
shares amounting to NIS 5,787,000.00 were issued.
1. A.L. CASTRO HOLDINGS LTD.,
37%, owned by Aharon and Ms. Lina Castro,
2. ROTER HOLDINGS LTD., 36.3%,
owned by Gabriel and Ms. Esther Rotter,
3. HAREL INSURANCE, 9.9%,
MIGDAL, 5.1%, both institutional investors,
4. Shares are also traded on the
Tel Aviv Stock Exchange (TASE).
1. Amir Tamari, Chairman,
2. Gabriel
(Gabi) Rotter, Joint General Manager,
3. Mrs. Esther (Eti) Rotter, Joint General Manager, daughter of the Castro couple and wife of Gabi,
4. Ms. Moran Meiri,
6. Eliyahu Joseph,
7. Amir Caduri Hayek,
8. Ms Yael Elad.
Designers,
importers, manufacturers (via subcontractors in Israel and abroad), exporters
and marketers of women and men wearing apparel, footwear and fashion accessories
(belts, handbags, wallets).
Also, operating
179 retail fashion stores (26 woman, 27 men, 8 surplus stores, 2 accessory
stores and 58 men and woman stores – counted as 2 stores each).
In August 2013 subject
launched its children's apparel line (store within store format) with 22
branches.
During 2011 Group
ceased operating abroad (Germany, Russia, Ukraine, Latvia, Switzerland, Romania
and Thailand), and all activities are in Israel.
Group also ceased
operating the "Diva" fashion accessories chain in end of 2012.
Among local
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.
Operating from
owned headquarters premises, on an area of 2,565 sq. meters, of which 4,745 sq.
meters built (serving the Group), in 31 Ort Israel Street, Industrial Zone, Bat
Yam, (subject also holds the rights to property in 33 Ort Israel on an area of
2,445 sq. meters), and from a logistics center in Zrifin (rented, 7,580 sq.
meters).
Also operating
from retail stores all over the country, located mainly in shopping malls
(subject owns several properties which serve as subject's stores), as well as
surpluses stores (including a main one in 35 Ban Zvi Street, Tel Aviv – the
address you provided).
Having 1,140
employees serving CASTRO MODEL Group (had 1,618 employees in the end of 2011).
Consolidated B/S
shows:
NIS
(thousands)
31.12.2012 30.06.2013
ASSETS
Current assets
Cash
and cash equivalents 59,721 22,689
Other
financial assets 108,192 110,025
Customers 86,820 64,480
Other
debtors 12,748 16,445
Other assets 1,735 7,561
Inventory
142,886 123,471
412,102 344,671
Non-current assets
Investments 13,418 10,826
Fixed
assets, net 106,472 112,316
Other
assets 25,943 24,933
145,833 148,075
557,935 492,746
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LIABILITIES
Current liabilities 171,406 134,385
Non-current liabilities 71,514 40,745
Equity 315,015 317,616
557,935 492,746
======= =======
Current market
value US$ 188 million.
There are 3
charges for unlimited amounts registered on the company's assets (financial
assets and fixed assets), in favor of Bank Leumi Le’Israel Ltd. and Bank
Hapoalim Ltd. (charges placed 1998, 1997 and 1993).
Consolidated
Statement of Income
NIS
(thousands)
Year
ended 31.12
2010 2011 2012
Sales 597,364 649,452 705,858
Gross profit 363,925 394,430 426,913
Operating income 68,136 76,912 74,477
Pre-tax income 65,342 69,452 72,518
Net income 642 48,003 58,254
======= ======= =======
Note: 2010 low net
income is due to loss of ceased activities (international activities) of NIS
48.9 million.
Consolidate sales for the first 6 months of 2013 were NIS 366,153,000
(8.6% increase compared to the parallel period in 2012), making a gross profit
of
NIS 222,102,000, an operating profit of NIS 37,471,000, and a net profit of
NIS 27,051,000.
CASTRO SINGAPORE
PTE LTD., 100%, Singapore, non-active, holds 100% of CASTRO ASIA (MACAO
COMMERCIAL OFFSHORE) LTD.
DIVA FASHION
ACCESSORIES ISRAEL LTD., 50%, ceased activities in the end of 2012.
Bank Leumi
Le’Israel Ltd., Tel Aviv Central Branch (No. 800), Tel Aviv.
Bank Hapoalim Ltd.,
Business Central Branch (No. 600), Tel Aviv.
Currently, 2
pending motions submitted to the court for their approval as class action
lawsuits. The first in April 2013 for the sum of NIS 213.5 million regarding
refunds using subject's gift cards, and the 2nd, from July 2013 for
NIS 149.5 million regarding violation of employment rules.
It should be noted
that the procedure for such claims to be approved are usually long and mostly
eventually turned down or end in compromise.
Also there is a
legal case (which was submitted as a class action lawsuit) currently in
arbitration.
Nothing
unfavorable learned apart from that.
Subject is one of
the leading fashion chains in Israel (design and retail), the most recognized
fashion brand.
Subject was also,
since 2003, one of the pioneers in the fashion retail business expansion
abroad. Yet following losses in the international field, subject ceased
operating abroad, closing down all international activity in 2011, and
liquidating its companies (currently in the process of liquidating CASTRO UK
LTD.).
In mid 2005,
subject, jointly with British partner DCK, launched its new sub-chain for
fashionable jewelries and accessories called "Diva", offering some
20,000 items. Subject invested several millions in the venture, however,
following losses in this segment, subject gradually decreased its
"Diva" stores, and in the Q4 2012 closed the last store and ceased
the "Diva" activity.
In August 2007,
subject launched a campaign for a new jeans line, called "Dark
Jeans", with investment of NIS 2 million.
In November 2007,
subject invested NIS 4 million in its winter campaign.
The advertising
agency handling subject is REUVENI FRIDAN.
In April 2008 it was
reported that subject opened a flag store in Jerusalem, investing NIS 1.2
million.
In March 2009 it
was reported that subject invested NIS 8 million it upgrading its flag store in
Tel Aviv, on an area of 1,050 sq. meters, in the Dizengoff Mall.
In August 2009
subject purchased 2 store premises on a total area of 311 sq. meters in Gan
Hair Mall, Tel Aviv (a very prestigious location), paying NIS 7.2 million.
In January 2013
subject launched an online store.
In August 2013
subject launched its children's clothing line (including accessories), with an
investment of NIS 18 million, opening 22 stores (store in store format).
Subject is intending to open further 10 stores till the end of 2013, and
convert its 2 accessory stores to children's clothing stores (selling
accessories in the stores).
According to reports from the end of 2012,
total sales of the local fashion market are NIS 11 billion per annum. 40% of
sales are in the large fashion chains, 34% in other smaller chains, and the
rest in private shops.
According
to the fashion market survey, which monitors sales by the local fashion chains,
2012 marked almost a freeze in sales, with mere 0.7% increase from 2011. The
data reveals that in 2012 41 fashion chains (out of 72 chains with total of
over 1,600 shops) noted decrease in sales of aparel and footwear.
Based on 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.
According to the Central Bureau of Statistics (CBS), import of
Clothing and Footwear in 2012 rose by 5.1% (in $ terms, marked 13.3% in NIS
currency terms), summing up to US$ 1,759 million. That data shows on the
continuing growing trend from the last couple of years – by 19% and by 13.4% in
2011 and 2010, respectively, in comparison to the previous year. 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 has been significantly influenced by the entrance of new international
fashion players to the already highly competitive local market (GAP, H&M in
2009/2010, Forever 21 in 2011).
Sources in the local fashion branch noted that in the last period the branch
re-entered
slow-down and stagnation, resulting in drop in sales. There have been also few
collapses of veteran and big players in some niches, such as children's
apparel. The 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 have
been experiencing decrease in sales over the last 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 also due to global markets
weakness in 2011 and 2012 fell again by 6.6% and 6.7%, respectively, reaching
US$ 808 million in 2012.
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.
From the Central
Bureau of Statistics (CBS) National Accounts for 2012, it turns that
expenditure by local households on private consumption grew by 2.7% from 2011,
after rising by 3.8% in 2011. Expenditure on
clothing, footwear and personal effects rose by 7.2% (after 2.4% rise in
2011).
Per-capita expenditure increased by 0.9%
(1.9% rise in 2011).
Per capita expenditure for private consumption on non-durable goods
rose in 2012 by 1.4% per-capita (1.3% rise in 2011). This rise reflects
increases by 1.3% in expenditure on food,
beverage and tobacco and 4.5% expenditure
on clothing, footwear and personal effects.
Good for trade
engagements.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.62.36 |
|
UK Pound |
1 |
Rs.101.20 |
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Euro |
1 |
Rs.84.54 |
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 |
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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 |
|
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 |
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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 |
|
-- |
NB |
New Business |
-- |
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.