Zisser negotiating sale of MANGO, Gap franchise

Israeli businessman leaving fashion business, demanding NIS 100 million for Elbit Medical Imaging retail operations. According to estimates, potential buyers include owners of Factory 54, Hamashbir, Castro and Dudi Weissman

Reuters | Published: 08.11.10, 07:46

Businessman Moti Zisser is negotiating the sale of Elbit Medical Imaging retail operations and is demanding NIS 100 million (about $27 million), Calcalist reported Tuesday.

The move is surprising, as the company added what is considered the most significant brand, Gap, to its trade and retail operations portfolio less than a year ago.

In an interview granted when the Gap opened its first store in Israel, Arik Ben-Zino, who heads Elbit's Trade and Retail division, stated that the group plans to open at least 20 Gap stores in Israel in the next five years. At present Gap has stores in the Azrieli Center, Mamilla Mall in Jerusalem, Arena Mall in Herzliya and the Mul Hayam mall in Eilat.

In addition to the Gap, Elbit Trade and Retail also operates the Israeli concession for Spanish fashion giant MANGO, which has 26 stores in Israel. The license was acquired in 2005 for $3.8 million. Elbit also has the license for Dutch fashion label G-STAR, which has two stores in Israel.

The decision to sell the retail operations stems from financial losses. During the first quarter of 2010, Elbit Medical Imaging revenues from its retail operations stood at NIS 42 million ($11 million), as compared to NIS 22 million ($6 million) during the equivalent quarter in 2009.

The increase resulted mainly from Gap sales and improved revenues at MANGO stores. The cost of retail operations amounted to NIS 50 million ($13 million), compared to NIS 28 million ($7 million) during the corresponding quarter in 2009, indicating losses.

According to estimates, potential buyers are leading figures in the industry, including the Irani family, which owns Facotry 54, Castro, Hamashbir Lazarchan and H&O, as well as David Weissman, who owns the Blue Square chain.

Elbit Medical Imaging stated in response that, “The company is reviewing a range of business proposals pertaining to all of its divisions, including those in the retail branch.”