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Report Date : |
18.02.2014 |
IDENTIFICATION DETAILS
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Name : |
NAOT FOOTWEAR
AGRICULTURAL COOPERATIVE SOCIETY FOR BUSINESS LTD. |
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Formerly Known As : |
NAOT FOOTWEAR (1994) LTD |
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Registered Office : |
Mobile Post Upper Galilee, Naot Mordechai 1212000 |
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Country : |
Israel |
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Year of Establishment : |
1942 |
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Com. Reg. No.: |
57-003775-4 |
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Legal Form : |
Public Limited Company |
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Line of Business : |
Designers, manufacturers, marketers and exporters of men and women
comfort footwear |
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No of Employees : |
250 |
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 – december 01, 2013
|
Country Name |
Previous Rating (30.09.2013) |
Current Rating (01.12.2013) |
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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.
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Source
: CIA |
NAOT FOOTWEAR AGRICULTURAL COOPERATIVE SOCIETY FOR BUSINESS LTD.
(Trading as: TEVA NAOT)
Telephone 972 4 694 81 31;
972 73 212 01 11
Fax 972 4 695 01 11
Mobile Post Upper Galilee
NAOT MORDECHAI 1212000 ISRAEL
Originally
established as a cobbler shop in Kibbutz Naot Mordechai a cooperative society,
operating a communal agricultural settlement in 1942.
Converted into a
General Partnership and registered as such as per file No. 54-010291-0 on the
01.09.1970 under the name NAOT FOOTWEAR PARTNERSHIP.
In 1994 converted
into a private limited company, which was registered as per file No.
51-193576-9 on the 10.02.1994 under the name NAOT FOOTWEAR (1994) LTD., which
on 03.08.1994 changed registration No. 52-004191-4 (in view of turning into a
public limited company, though eventually did not).
In 1998 all
business activities were re-assumed by a/m NAOT FOOTWEAR PARTNERSHIP (NAOT
FOOTWEAR (1994) LTD. turned inactive).
Finally on the
01.01.2001 all activities and assets were transferred to subject, an
Agricultural Cooperative Society (ACS) registered as such as per file No.
57-003775-4 on the 19.11.2000.
Subject is fully
owned by NAAMA NAOT HOLDINGS LTD., owned by:
1. MIZRAHI TEFAHOT TRUSTEE CO.
LTD., 81%, holdings shares on behalf of 2 shareholders: SHAMROCK Group (50%), an investment fund, controlled by Disney family and headed by Stanley Gold; and an Israeli
CPA (50%), a private shareholder (name was not disclosed – see CHARACTER),
2. K.N.M. HOLDINGS ACS LTD.,
17%, fully owned by Kibbutz Naot Mordechai, a cooperative society, operating a
communal agricultural settlement (held via a holding company),
3. Yaniv Shekel, 2%.
In November 2006 SHAMROCK Fund acquired 66% of
subject from Kibbutz Naot Mordechai, according to a company value of NIS 130
million. In end of 2008, SHAMROCK Group exercised its option to acquire a
further 17%.
1. Dr. Arie Ovadia, Chairman, Managing Director
in SHAMROCK ISRAEL,
2. Michael Iluz, General Manager.
Designers,
manufacturers, marketers and exporters of men and women comfort footwear
(shoes, sandals, etc.), under the brand name “Teva Naot” and "Naot".
TEVA NAOT Group
operates a retail chain store, situated mainly in shopping malls, and a
sub-chain for orthopedic footwear under the name "Medifut By Naot"
(in Naot shops). Having over 60 retail stores, 10 of which being operated by
concessionaires. Also markets as wholesaler to some 300 local footwear stores.
Some 75% of sales
are for export. Exports are worldwide, in over 6,000 point of sales.
Group also
operates stores in Germany, Canada, Australia and Singapore.
Among local clients: CALIFA SHOES, MORSI
SHOES, SAKAL SPORT, FREIMAN & BANE, etc.
Among local suppliers: PLAS GLASS, ADSTICK, ABART ITZHAK, etc.
Purchasing is also via Kibbutz association buying firm TOAM IMPORT &
EXPORT.
Group is sole
local representatives of:
THERESIA M, K
SWISS, SANTIA, PALLADIUM.
Operating from premises
(plant, warehouse and retail store), on an area of 6,000 sq. meters, in Kibbutz
Naot Mordechai (premises is owned by the Kibbutz and rented to subject), and a
rented office on an area of 100 sq. meters, in 1 Korazin Street, Givatayim.
Also operating through TEVA NAOT retail chain of over 60 shops countrywide. The
Group also operates independently over 20 of footwear stores overseas.
Having 250
employees (had 230 employees in mid 2012, similar to 2011, had 220 employees in
mid 2010).
There are several
hundred employees serving TEVA NAOT Group abroad.
Current stock is
valued at NIS 40,000,000 (similar to the end of 2011, was valued at NIS
20,000,000 in mid 2010).
Data from B/S
31.12.2009 (last obtainable):
Total assets: NIS
70,000,000.
Equity: NIS
20,000,000.
In March 2011 it
was reported that subject is investing NIS 2.5 million in the expansion of its
plant, to increase its production by 35%. According to the report, subject
manufactured 1.8 million pairs in 2010.
Subject is an
“Approved Enterprise” and as such enjoys tax benefits and State incentives. In
January 1997, the Investment Center Authority approved a US$ 2.5 million
investment plan for the expansion of subject’s plant.
Sales (of which
75% for export):
2005 sales claimed to be NIS 110 million,
making a pre-tax profit of NIS 21 million.
2006 sales claimed
to be NIS 136 million.
2007 sales claimed
to be NIS 150 million.
2008 sales claimed
to be NIS 130 million.
2009 sales claimed
to be NIS 160 million. Subject's accountant informed us that subject ended 2009
with profit.
2010 sales claimed
to be NIS 190 million.
2011 sales claimed
to be NIS 200 million.
2012 sales claimed
to be NIS 200 million.
2013 sales claimed
to be NIS 200 million.
DAFNA FOOTWEAR – AGRICULTURAL COOPERATIVE SOCIETY FOR BUSINESS LTD.,
70%, activities
originally started in 1964, manufacturers, marketers
and exporters of footwear for men, women and children, mainly boots (including
riding boots) and slippers, made of P.V.C., polyurethane, etc. 2010 sales NIS 12
million.
TEVA NAOT ACS FOR
BUSINESS LTD.,
NAAMA NAOT
HOLDINGS LTD.,
NAAMA EUROPE LTD.,
sister company.
NAOT FOOTWEAR (1994) LTD., inactive.
Bank Leumi
Le'Israel Ltd., Kiryat Shmona Branch (No. 976), Kiryat Shmona, account No.
23500/97 – main account.
A check with the Central Banks' database did not reveal any negative
information regarding subject's a/m account.
Also working with:
Bank Hapoalim
Ltd., Kiryat Shmona Branch (No. 718), Kiryat Shmona.
Mizrahi Tefahot
Bank Ltd., Kiryat Shmona Branch (No. 487), Kiryat Shmona.
A dispute arose
between SHAMROCK and Avi Toledano, in which Avi Toledano filed a request to the
Tel Aviv District Court to appoint an arbitrator between the sides, which was
granted by the Court on the 20.2.2013 (case No. 57817-11-12).
According to
reports from December 2012 - January 2013, Avi Toledano claimed that he was
unjustifiably dismissed from his position as Group's General Manager, due to
his refusal to sell his holding in subject, and that SHAMROCK operated in the
interest to harm his position and personnel appointed by him.
SHAMROCK claims
that Toledano failed in this position, causing subject and Group losses,
especially due to the unsuccessful investment in the German activities
(According to a report from December 2012, subject made a € 4 million write
off), and demands that Toledano returns US$ 3 million which SHAMROCK gave him for the acquisition of former
shareholders holdings.
According to our,
matter is still pending.
Note: We estimate that
the CPA on whose behalf the Trustee is holding shares of, besides SHAMROCK, may
be Mr. Toledano. Subject's controller we spoke to refused to relate to that
when we asked him.
On the 06.06.2012,
a motion was submitted to the court for the approval as a class action lawsuit
against subject and 3 more manufacturers of comfort shoes for the sum of NIS
245 million. The plaintiffs claim that subject and the other companies have
been dictating unified prices to avoid competition. It should be noted that the
procedure for such claims to be approved are usually long and mostly eventually
turned down.
Nothing
unfavorable learned apart from that.
Subject is leading
in the sale of convenient sandals in Israel and also a leading player in the
field in the international arena.
Kibbutz Naot
Mordechai, founded in 1946, has some 300 members. The Kibbutz is also involved
in traditional farming activities, including field crops, fruit orchards and
fattened poultry. In addition, it is has other smaller business ventures.
SHAMROCK Fund is
an investment fund controlled by D
In March 2011 it was reported that 4 years after entering as an investor in
subject, SHAMROCK is putting its shares for sale (at least part of it), which is part of the Fund's policy to realize investments up to 5 years.
No further data was found on that matter.
In early 2000s
subject signed agreements to market its sandals and shoes in the CLARK’S chain
in England (500 stores), with Canadian SOLE MATE, with AUSES-BEARS of Australia
(100 stores throughout Australia), with
GALLERY LAFAYET of
France and with G.I INTL. of Japan.
In 2003 it was
reported that subject acquired the footwear retail chain store TOMER's, in
consideration of NIS 3.5 million.
In 2005 it was
reported that subject signed an agreement with the footwear chain FOOT HEALTH COMFORT
SPECIALISTS of Hong Kong and Singapore for export of convenient footwear in
volume of NIS 2.5 million, and with Singapore company AUSBRAS, for NIS 3
million.
In December 2005
subject opened via concessionaires a new store in Germany for its brand, with
initial investment of US$ 400,000.
In June 2006 it
was reported that subject signed an agreement with NORDSTROM American footwear
chain, to sell its products. The deal volume said to be of US$ 1 million.
In end of 2007, as
part of its strategy to expand in the international arena, subject acquired
THERSIA M
In July 2008 NAAMA
NAOT acquired "Mentz" shoe chain store (13 stores) in Germany for NIS
6.5 million.
In
September-October 2008 subject signed an agreement to acquire 70% of DAFNA
INDUSTRIES, a local veteran shoe factory for NIS 7 million, after the plant
experienced financial difficulties. The reminder 30% was left by Kibbutz Dafna.
The transaction was completed during 2009.
In March 2009 it
was reported that subject signed a deal with TRADE HOME SHOES of USA, for sales
of NIS 4.5 million in 2009.
In June 2009 it
was reported that subject signed a distribution deal in Australia with THE
ATHLETES FOOT, estimated sales are US$ 3 million.
In July 2009 it
was reported that subject will start selling comfort socks, investing NIS 4
million.
In August 2009 it
was reported that subject will open a sub-chain 'store in store' for orthopedic
products with 10 branches, investing US$ 1 million.
In February 2010
it was reported that TEVA NAOT Group opened 2 stores in Canada investing NIS 2
million. In February 2011, it was reported on the opening of 3 new retail
stores in Toronto and Montreal, with NIS 3 million investment. The chain in
Canada thus would reach 12 stores (had sales of NIS20 million in 2010).
In April 2010 it was
reported that subject signed exclusive distribution agreements to market
leading international brands THERESIA M, K SWISS, SANTIA, PALLADIUM, with
investment of NIS 3 million.
In October 2010 it
was reported that subject is expanding its activities, with the opening of a
new chain store of 12 orthopedic institutes under brand name
"footfit", selling orthopedic footwear, special medical footwear and
accessories. Investment in the move said to be NIS 4 million.
In August 2010, it
was reported that subject signed an agreement with a Japanese company to market
"Teva" footwear in Japan, in some 30 shops.
In February 2012
it was reported that subsidiary DAFNA in entering a tender of the Israel
Defense Force to manufacture 30,000 army shoes for women
In April 2012 it
was reported that DAFNA will export boots to South Korea in volume of €
500,000.
In August 2013 it
was reported that subject closed its first deal in the Russian market, with
CALIPSO, to market 'Dafna' boots, in a deal valued € 150,000.
In July 2012 it
was reported that subject is entering a new footwear category with a line of
large-size for women, in which NIS 2 million invested in development. In
addition, subject launched a new men comfort shoes line.
In June 2012 it
was reported that subsidiary DAFNA is investing NIS 1 million in establishing a
production line for the Far East, and it signed an agreement to supply HLMC of
South Korea some 10,000 boots in volume of US$ 1 million, with expected 2012
export volume to Japan Korea and Singapore of US$ 7.5 million.
In January 2013 it
was reported that subject is opening a retail store in the ARCH ANGEL chain of
Singapore, investing US$ 250,000.
In December 2013 it was reported that subject is
opening its first store in Japan, investing US$ 500,000 (in continuance to the
establishment of production line suited for customers' tastes in the Far East
with NIS 1 million investment), with an intention to open further 2-3 stores.
The local footwear market rolls an annual
turnover of around NIS 3.5 billion according to sources in the branch, mostly
from import, with 33 million pairs of shoes sold each year over some 1,500
footwear stores. Annual consumption per capita is 4-5 pairs of shoes.
According
to the Central Bureau of Statistics (CBS), import of Clothing and Footwear in 2013
rose by mere 0.9% from 2012 (in NIS terms, rose by 7.9% in $ terms), summing up
to NIS 6,854 million. This is after 2012 marked 13.3% rise (5.1% in $ currency
terms). That data shows on the continuing growing trend over the last 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.
From the 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 2010. Expenditure on clothing, footwear and personal effects rose by 7.2% (after 2.4%
rise in 2011). Expenditure on private consumption continued to grow in 2013: it
rose by 5.6% in 3rdQ 2013, after a 6.2% increase in the 2ndQ 2013.
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.
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 over the last periods the
branch re-entered
slow-down and stagnation, resulting in drop in revenues. There have been also
few collapses of veteran and big players in some niches, including in the
ladies fashion and 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.
Moreover, senior
figures in the local fashion and apparel branch, as well as from the shopping
malls sector, commented in November 2013 that few more chains are on the verge
of collapse.
Good for trade engagements.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs. 61.95 |
|
|
1 |
Rs. 104.02 |
|
Euro |
1 |
Rs. 84.95 |
INFORMATION DETAILS
|
Report Prepared
by : |
DPT |
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 |
|
-- |
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.