Golf CEO: “We will support Adika in every way, but no more money”

Eyal Greenberg, CEO of the Golf Fashion Company and Chairman of the Board of Directors of the subsidiary Adika, rarely gets interviewed and exposed in the media. Yesterday, in an open conversation with investors, he shed light for the first time on the state of the online company and Golf’s plans for its recovery.

“In Golf’s commitment to Adika, we pledged NIS 20 million. We poured in NIS 10 million, and in the coming months – very soon – another NIS 10 million will be used. Never resilience. We do not intend to continue pouring tens of millions of shekels on Adika,” Greenberg said.

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Adika branch. Greenberg: “Golf is underpriced relative to its competitors”

(Photo: Camila Simon)

According to Greenberg, Golf believes in the brand and will support it in every way. “Along with its flow, we are committed, we do everything possible to create synergy between the companies. The overarching goal of all of us is for the company to go green. A golf team has invested a lot of money in Adika and it believes in the brand,” Greenberg said.

“When I joined the board I did not believe in the road, I did not believe in a quick entry into the US,” Greenberg added. .

According to Greenberg, “We have become sober. One of the right things Golf has done, as a controlling shareholder, is to take the reins. We are leading essential processes in the company – one of the most important things is signing the services agreement. Adika, in its spending structure today, is still bleeding. “For a company like Golf, but certainly not something we want to see. Its service agreement says that Adika can use golf in the worlds of import, production, logistics. The truck that travels to Golf will also travel to Adika. This disillusionment took time.”

Adika has suffered setbacks in the last two years with the departure of the founding management headed by her Dedi SchwarzbergAnd after the basket shepherds Appointed Deputy CEO And appointed its own management, too Left the company After only a year, and Adika had a hard time finding an alternative CEO for about a year. He was recently appointed to the position Noam MelnikWho worked as a business development manager at Azrieli.

“After two executives left the company in two years, our entry into the company was also when I was experiencing a complex private event,” Greenberg said. We realized that the global dream is something that needs to be developed heel-to-toe, perhaps with a global partner. At the same time, Adika has great potential in the Israeli market. ”

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Golf CEO Eyal Greenberg

(Photo: Uriel Cohen)

Greenberg also revealed that in the past there was interest in buying Adika, but “sales dreams are not on the agenda today, so we realized we need to produce a company with a positive bottom line. It is a strong brand, most relevant to its target audience in Israel, with a million followers on Instagram.”

Greenberg noted that international fashion companies also suffer from the situation in the markets. “I want a moment to talk at the macro level,” he said. “Fast fashion sites like Asus, Boohoo, Missguided – The stock of all three is plummeting. Unlike golf that shifts production to other places in the world, 90% of their collection is made in China. Beyond all the corona and energy crises, a company like SHEIN Assaulting Mazara three times On the public, and much more attractive in terms of factories there to sell to China.

“The other side of the crisis is an increase in shipping prices, logistics – every fast fashion company only works with in-flight shipping. Today, when the shipping cost is 35% -30% of the shopping basket – it’s a piece of story. Add to that an increase in marketing and advertising prices, and you reach a company that needs To fight for her world. ”

Greenberg also talked to investors about Golf Company First Quarter Results Which moved to a loss in the first quarter. He said, “Our biggest surprise in golf is the fashion sector, both in 2021 and in the first quarter of 2022. Our growth engines in this sector are Intima, which has already become a significant player in the field of women’s lingerie, and fashion golf.

On continued growth: “We were in quite a few negotiations to acquire companies, but a board member told me: ‘When you have a fire in the kitchen, you do not build a guest room'”

“It’s no secret that when I came to the company, still as a consultant, there was an orderly work plan to reduce the fashion stores and strengthen the home stores (Golf & Co.) which is the strong side of the group. We decided to give the fashion sector another chance and I am happy about that. We see an improvement in each of the parameters – a significant increase in revenue per square meter, an improvement in profitability, this sector today is already equal to the home sector. “

Asked what the reasons are for the change in trend in the fashion sector, he replied: “I think first and foremost the understanding that our field is not classic fashion, and the refinement of our customers. Both unfortunately and happily – Golf does not appeal to classic Zara customers. Like a religious audience and bringing in young audiences, it helped. I’m very surprised by the success of Golf’s site, and it’s only gone up in the last year. By Asus – Israel) ”.

Regarding the continued growth of golf, Greenberg said that “we have also been in quite a few negotiations to acquire companies in our fields, but a wise board member told me: ‘When you have a fire in the kitchen, do not build a guest room’ (refers to Adika activity – Israel). We are constantly looking at companies, alongside the development from home. ”

Regarding the continued purchase of shares, Greenberg said: “All options are at stake. We estimate that the company is underpriced relative to its competitors.”