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Report No. : |
303052 |
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Report Date : |
17.01.2015 |
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, Airport City 6 Hermon Street AirPort City Park Airport City 7019900 Israel |
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Country : |
Israel |
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Date of Incorporation : |
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 apparel and fashion accessories |
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No. of Employees : |
Not Available |
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 – September 30, 2014
|
Country Name |
Previous Rating (30.06.2014) |
Current Rating (30.09.2014) |
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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. Cut diamonds, high-technology equipment, and
pharmaceuticals are among the leading exports. Its major imports include crude
oil, grains, raw materials, and military equipment. Israel usually posts
sizable trade deficits, which are covered by tourism and other service exports,
as well as significant foreign investment inflows. Between 2004 and 2011,
growth averaged nearly 5% per year, led by exports. 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. 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. The
economy has recovered better than most advanced, comparably sized economies,
but slowing demand domestically and internationally, and a strong shekel, have
reduced forecasts for the next decade to the 3% level. Natural gas fields
discovered off Israel's coast since 2009 have brightened Israel's energy
security outlook. The Tamar and Leviathan fields were some of the world's
largest offshore natural gas finds this past decade. The massive Leviathan
field is not due to come online until 2018, but production from Tamar provided
a one percentage point boost to Israel's GDP in 2013 and is expected to
contribute 0.5% growth in 2014. In mid-2011, public protests arose around
income inequality and rising housing and commodity prices. Israel's income
inequality and poverty rates are among the highest of OECD countries and there
is a broad perception among the public that a small number of
"tycoons" have a cartel-like grip over the major parts of the
economy. 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. In May 2013 the Israeli government, in a politically difficult process,
passed an austerity budget to reign in the deficit and restore confidence in
the government's fiscal position. Over the long term, Israel faces structural
issues, including low labor participation rates for its fastest growing social
segments - the ultra-orthodox and Arab-Israeli communities. Also, Israel's
progressive, globally competitive, knowledge-based technology sector employs
only 9% of the workforce, with the rest employed in manufacturing and services
- sectors which face downward wage pressures from global competition
|
Source
: CIA |
FOX-WIZEL LTD.
Telephone 972 3 905 01 00
Fax 972 3 905 02 06; 905 02 00
P.O. Box 76, Airport City 6 Hermon Street
AirPort City Park Airport City 7019900 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 13,267,032 shares amounting to NIS 132,670.32 were issued.
WIESEL HOLDINGS A.I.H LTD., 25.9%, equally owned by Harel Eliezer Wiesel, Iftach Wiesel and Assaf Wiesel,
Avraham Dov Fuchs (through TRICO FOX LTD.), 25.5%,
MIGDAL Group, YELIN LAPIDOT Group, CLAL HOLDINGS - 3 institutional investors, holding 10.1%, 6.4% and 5.1%, respectively,
Shares are also traded on the Tel Aviv Stock Exchange.
Avraham Zeldman, Chairman,
Harel Wiesel, General Manager,
Avraham Dov Fuchs,
Israel Maimon,
Alon Cohen,
Ms. Osnat Ronen.
Designers, importers, manufacturers, marketers, exporters and retailers of apparel 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" and "Aerie" ("AE" Brand), "The children's Place " and "Yanga". Also operating "Marsha" shoe brand.
Note: subject recently received the representation of NIKE, MANGO, CHARLES & KEITH, intending to open these brand stores – see more in CHARACTER.
Also importers and marketers of household product branded "Fox Home".
Sales are to subject's shops, to wholesalers, institutional organs, 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.
As of 30.09.2014, operating 222 branches in Israel of which 167 "Fox" brands including 36 stores of "Fox Home" brand and 8 combined "Fox" apparel and "Fox Home" stores, as well as 34 branches of "American Eagle" apparel and "Aerie" lingerie brand. Also operating 21 "The Children's Place" stores.
In addition, operating via concessionaires through 243 branches and Points of Sale abroad under the name "Fox" in 11 countries: Singapore, Thailand, Panama, The Philippines, Cyprus, Kazakhstan, Serbia, Mongolia, Cost Rica, Bolivia and Russia. Sales are also via distributors in Russia, Kazakhstan, Panama, Greece, India, Belgium and Germany.
Subject, via its subsidiaries, also marketers clothes and fashion accessories under the brand name “Sacks” – 16 branches, "Billabong" – 36 branches, "Yanga" – 7 stores, and home care and body care products under the name "Lalin" – 90 branches (as well as 16 "Lalin" concessionaire stores abroad).
Also operating 10 points of sales in local malls of "Marsha" + 8 points of sale abroad.
Advertising agency: GITAM BBDO.
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, Fox House, Airport City Park (near Ben Gurion Airport, Lod), and from retail stores nationwide (as of end of 2013 rents 189 active shops, situated mainly in shopping malls and centers – Note: some stores are combined stores which are considered 2 stores).
Landlord in Airport City: TNUVOT KESHET.
Having 2,841 employees in subject as of beginning of 2014 (had 2,540 employees at the end of 2012) and further 1,097 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 31.12.2013 30.09.2014
Current assets:
Cash and cash equivalents 41,740 49,968
Sort term investments & financial assets 1 48,054 136,096
Customers 117,254 105,882
Other debtors 21,461 52,358
Stock 174,313 237,198
502,822 581,502
Non-current assets:
Financial assets 56,072 54,643
Fixed assets (net) 182,735 211,255
Intangible assets 8,450 9,273
Other
non-current assets 123,423 142,891
370,680 418,062
873,502 999,564
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LIABILITIES
Current liabilities 164,415 177,955
Non-current liabilities 208,801 295,778
Equity 500,286 525,831
873,502 999,564
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Current market value US$ 306.9 million.
There are 8 charges for unlimited amounts, as well as 2 charges for the total sum of US$ 16,100,000 registered on the company's assets, in favor of Bank Leumi Le’Israel Ltd., HSBC Bank Plc. and Bank Hapoalim Ltd. (last 2 charges placed July-November 2013).
Consolidated Statement of Income
NIS (thousands)
Year ended in 31.12
2011 2012 2013
Sales 819,124 1,064,614 1,047,700
Gross profit 476,546 610,881 619,733
Operating income 104,824 118,053 135,343
Pre-tax income 100,287 107,468 120,689
Net income 75,465 82,037 94,190
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Consolidated sales for the first 9 months of 2014 were NIS 779,330,000 (4% increase comparing to the parallel period in 2013), making a gross profit of
NIS 467,241,000, an operating profit of NIS 48,090,000 and a net profit of
NIS 49,231,000.
FOX - WIZEL CHINA LTD., 100%, a subsidiary in China.
FOX - WIZEL 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. holds 66.7% of MARSHA BALERINA LTD., import and marketing of shoes.
LALIN CANDLES AND SOAPS LTD., 50%, manufacturers and marketers of home care and body care products and accessories, including soaps, candles, body care items, toiletries, ambiance products, etc.
LALIN INTERNATIONAL LTD., 50%.
A.H. FASHION MANUFACTURE AND MARKETING 3020 LTD. (known as "Sack's"), 50%.
FOX WIZEL (BVI) LTD., 100%.
YANGA LTD., 50%, operating a retail fashion chain.
WIESEL REAL ESTATE A.I.H. (1999) LTD., sister company.
TRICO FOX LTD., leasers of real estate.
Bank Leumi Le’Israel Ltd., Principal Branch Tel Aviv (No. 800), Tel Aviv.
Also known to work with:
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 February 2010 a motion was submitted to the court for the approval as a class action lawsuit against LALIN, for NIS 109 million, which ended in compromise in September 2014 in which LALIN will provide compensation (via discount and increased package size) in volume of NIS 2.5 million.
In December 2013, 2 motions was submitted for the approval as a class action lawsuit, one against subject and another against subsidiary for the sums of NIS 10 million and NIS 6.6 million, respectively.
It should be noted that the procedure for such claims to be approved are usually long and in most cases eventually turned down. We found no further information regarding this matter.
Apart from that, nothing unfavorable learned.
FOX – WIZEL is a leading vendor in fashion wear for women, men and kids in Israel, with impressive growth rates over the last years, including expansion to overseas markets.
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.
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
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.
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.
In
November 2014 subject signed a memorandum to sell AEO 50% of "American
Eagle" and "Aerie" brands activities.
In
January 2012 it was reported the subject intends to open a flagship retail
store called "Fox House", on an area of 7,000 sq. meters, with all
Group's brands.
In March 2013 subject started operating the "Marsha" shoe pointy of sale in malls throughout Israel, and in August 2013 opened 2 points of sale in London.
In July 2013 subject received the franchise of the children's apparel brand "The Children's Place", and is intending to open the first shop in March 2014, and reach up to 10 shops, investing NIS 2 million in each shop.
In December 2013 it was reported that subject will operate 3 stores of the cosmetic and makeup company MAYBELLINE (part of LOREAL Group – though subject is not the local representative of LOREAL and MAYBELLINE).
In
May 2014 subject reported it received the representation of CHARLES & KEITH
INTERNATIONAL (C&K) to open a retail chain store for women's shoes, bags
and accessories. Estimated investment for the first 8 years is NIS 30 million,
all from subject's own resurces. Sales are expected to begin in Q1-2015.
In August 2014 subject acquired 50% of YANGA LTD., operating a retail fashion chain of 7 branches for NIS 9 million.
In August 2014 subject received from NIKE a non exclusive representation, to open NIKE chain store. According to a report from December 2014, subject is intending to invest NIS 30 million, of which NIS 20 million from acquisition of stores of current franchisers (in December 2014 subject acquired 4 shops for NIS 8.9 million + payment for stock, from franchiser VENDOME FASHION). Additional NIS 10 million will be from opening new stores.
In
September 2015 subject signed an agreement to acuire the fashion chain MANGO
(operating 29 shops) from ELBIT IMAGING, for NIS 35 million, following an agereement with
PUNTO of Spain (owner of MANGO brand) paying it NIS 3 million for the
franchise. Deal was completed in January 2015.
In
November 2014 it was reported that subject intends to open 119 new stors in
next 2 years: MANGO – 15 shops, CHARLES & KEITH – opening first 13 shops in
March 2015, and reaching 24 shops, Fox Home – 19 shops, The children's Place –
11 shops, American Eagle – 9 shops, Sacks – 6 shops, LALIN – 5 shops and
Billabong – 4 shops.
Reportedly, total revenues of the local fashion market in 2013
reached NIS 12 billion per annum. In 2012 sales reached NIS 11 billion. 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 revenues, 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 2014 increased by 8.3% (in NIS terms, rose by 9.5% in $ terms), summing up to NIS 7,421.6 million. This comes after in 2013 import rose by mere 0.9% from 2012, but rose by 13% in 2012.
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.
To
many players in the branch, the fierce competition, coupled with the slow-down
in local economy resulted in stagnation in sales and drop in revenues. There
have been also few collapses of veteran and big retailers in some niches,
including in the ladies fashion and children's apparel.
Moreover,
in particular for the recent period, local businesses in general, and the
fashion market in particular, sufferred a blow from the fighting situation in
Israel during July-August in the south of Israel, causing freeze in sales.
According to Central Bureau of Statistics (CBS), import of fabrics and yarns in 2014 witnessed a 2.3% rise from 2013, summing up to US$ 666 million, representing a reverse to the decreasing trend in the previous couple of years (fell by 1.8% and by 6.5% in 2013 and 2012, respectively from the previous year), though the rise in local NIS terms was milder – by 1.1% (in 2014).
Chinese production comprises the largest portion of imported textile goods followed by France, Italy, Hong Kong and Turkey. The increase in imports emanates from the exposure to foreign markets policy by the State.
Sales by local Textile, Clothing and Fashion Industries have been experiencing decrease in sales over the last years. Some 60% of the textile industry production is sold in the local market and the rest for export. Most exports are the North American market, and the industries suffered from the global economic crisis, mainly in the USA, as well as the slow-down in local market.
Sales for export by the Textiles, Wearing Apparel & Leather industries was in a decreasing trend over the last years: export fell by 6.6%, 6.7% and 5.3% in the years 2011, 2012 and 2013, respectively (from the previous year). However, in 2014 the trend reversed and export rose by close to 10%, reaching US$ 836 million.
Besides the weakness of global markets, the local industry has been in
state of crisis 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 CBS National Accounts for 2013, it turns that expenditure by local households on private consumption grew by 3.7% from 2012, after rising by 3.2% in 2012 and by 3.8% in 2011. From estimation for the 1st half of 2014, consumption grew by 2.1% in annual calculation (comparing to 4.4% rise in the parallel period in 2013).
Per-capita expenditure increased in 2013 by 1.8%, and by 0.2% in 2014 1stH.
Good for trade engagements.
Note: Since February 2013 Israel Post has started using a new area code method of 7 digits (the old method of 5 digits is no longer valid).
FOREIGN EXCHANGE RATES
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
Rs.61.89 |
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|
1 |
Rs.93.92 |
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Euro |
1 |
Rs.72.01 |
INFORMATION DETAILS
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Analysis Done by
: |
SUB |
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Report Prepared
by : |
NIS |
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.