Business in Brief: November 15

Lee Cooper Israel to close 36-store chain; BOI delays Leumi privatization; tomato prices jump; Shufersal profit rises on stable sales.

By GLOBES
November 14, 2010 22:15
Dr. Uri Krieger of HUJI stands with young tomato p

tomato plants 311. (photo credit: Zach Lipman)

 
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Lee Cooper Israel to close 36-store chain
By ILANIT HAYUT

Lee Cooper Israel Ltd. will close all its 36 stores and lay off over 350 employees, Globes has learned.

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The board of directors of parent company Concept Fashion Products Marketing Ltd., which holds the Israeli franchise of British fashion company Lee Cooper Brands Ltd., met last week and decided on the move.

Lee Cooper Israel will close all its stores, sell off inventory, settle its debts, and go out of business.

“I am trying to sell the business as a going concern, but we’ll have to close the chain in any case. The closing will be organized, with the objective of meeting all the chain’s obligations,” said Concept Marketing chairman Itzik Turgeman in response.

The sources added that Lee Cooper Israel began laying off staff on Friday. The decision to close down came after unsuccessful attempts to sell the franchise. Lee Cooper Israel is burdened by its large inventory, estimated at NIS 20-30 million. The franchise did not order the summer collection.

Sources believe that the chain will close by March 2011 at the latest.



In addition to the Israeli franchise, Concept Fashion Products Marketing operates 10 stores in Romania and 14 stores in Ukraine. Its turnover this year will be around NIS 110m. after a NIS 250m. turnover in 2009.

BOI delays Leumi privatization
By ERAN PEER

The Bank of Israel has vetoed the Finance Ministry’s decision to sell the government’s shares in Bank Leumi before the amendment to the Marani law is passed.

The Bank of Israel has previously agreed to the shares being sold before the amendment was passed but recently changed its position. The Bank of Israel’s greatest concern is the formation of an informal controlling core comprising businesspeople with shares in Bank Leumi who will seize control of the bank from below without any supervision or permit. The amendment to the Marani law is designed to determine how the Bank of Israel will supervise a bank without a controlling core and how Bank Leumi will operate without a controlling core. Consequently, the Bank of Israel has approached the Finance Ministry’s Accountant General Shuki Oren and asked him to delay the sale of the government’s shares in Leumi until the legislation is complete.

The central bank is also concerned that after the shares are sold, the Finance Ministry will not push for the law’s amendment.

“The Treasury just wants a big check – and won’t be interested in what happens to Bank Leumi after that,” said one Bank of Israel source.

Tomato prices jump
By ILANIT HAYUT

Only three weeks after the wholesale price of tomatoes fell to NIS 3.60 per kilogram, the price has again jumped and as of Sunday morning is nearly triple the price. On Sunday, the wholesale price of tomatoes was about NIS 9.40-9.80 per kilogram. The price translates to near record high retail prices, similar to those reached about a month ago, when they ranged from NIS 12-15 per kilogram.

The current rise seems to be specific to tomatoes, and is a result of the heat wave which again damaged crops. Against this, cucumber prices remain low at about NIS 1.60 per kilogram, compared to a price less than two months ago of about NIS 5 per kilogram.

Shufersal profit rises on stable sales
By HILLEL KOREN

Shufersal Ltd., Israel’s largest supermarket chain, posted higher profits on stable revenue for the third quarter of 2010. Revenue edged up 0.3 percent to NIS 2.89 billion for the third quarter from NIS 2.88b.

for the corresponding quarter of 2009. Same store sales rose 0.1%, but sales per square meter fell to NIS 5,664 in the third quarter from NIS 5,710 in the corresponding quarter.

Operating profit rose to NIS 127 million for the third quarter from NIS 126m. for the corresponding quarter.

Operating profit margin was unchanged at 4.4%.

“We had very good results for the third quarter, with about a 1% increase in gross profit compared with last year, and a stable operating profit margin of 4.4%,” said Shufersal president and CEO Effi Rosenhaus. “As part of our multiyear plan to expand our retail space by 100,000 square meters over the next five years, the company will open in 2010 seven mid-sized and large stores with about 15,000 square meters. This retail space is the base for boosting sales next year.” Net profit rose 12.7% to NIS 71m. or NIS 0.34 per share for the third quarter from NIS 63m. for the corresponding quarter.

Shufersal’s board of directors approved a dividend of NIS 0.92 per share, totaling NIS 200m.

Brack to float German real estate unit
By AVI SHAULY

Brack Capital Ltd., owned by Shimon Weintraub and Ronen Peled, has published a draft prospectus for an initial public offering by German subsidiary Brack Capital Properties BV on the Tel Aviv Stock Exchange (TASE).

Brack Capital Properties plans to offer 10-15 percent of its shares at a company value of at least €130 million, before money. Current shareholders in Brack Capital Properties include Galileo Technology founder Avigdor Willenz, former Bank Hapoalim chairman Shlomo Nehama (who plans to buy shares in the IPO), and Ashtrom Group Ltd. controlling shareholder Allied Holdings Ltd.

Brack Capital Properties, founded in 2006, took over the company’s German property portfolio, which it subsequently expanded. The portfolio currently includes 23 income-producing properties: 18 commercial buildings and five residential buildings. The draft prospectus states that Brack Capital Properties last month signed an agreement to sell 80% of its property portfolio, which generate a third of the company’s revenue to a third party, whose identity was not disclosed. The deal will reduce Brack Capital Properties’ shareholders’ equity to €4-5m. and narrow its loss to €6-7m.

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