The sports store chain Retailers , Controlled by a group Fox , Becomes the exclusive distributor of the old American brand Converse. The company reported that it has signed a binding agreement with Converse, under which it will market the American company’s products in Israel for 4.5 years, from July 1, 2022 to the end of 2026.
At the same time, Retailers reported that it would acquire full ownership of Energim and Energim Concept from their current owners, for NIS 34 million. About four months ago, Retailers reported that it had entered into a non-binding memorandum of understanding to acquire control (51%) of Energies, but later the outline of the deal changed, and it was finally decided to acquire full ownership of the importer and marketer of sports and fitness equipment for home and fitness use.
Under the current transaction, it was further stipulated that the sellers will provide Energies with services for a period of one year from the date of completion of the transaction, under the agreed terms. Retailers is expected to fund the purchase of the shares from its independent sources.
Completion of the transaction is subject to the existence of conditions precedent, including approval by the competition commissioner. According to Retailers, the revenue turnover of energies in the first half of 2021 amounted to NIS 39.4 million, while the net profit during this period was NIS 5.5 million.
The shareholders in Energim and the holding company Energim Concept (80%) are Peri Arnon and Farhiya Moshe. Energim has been operating since 1987 in the import and marketing of sports and fitness equipment, which it markets to sports shops, gyms, institutional bodies and the private consumer. It is also the exclusive importer of several leading brands in the world of sports and fitness, including Kettler, Inspire Escape, Horizon and more. In addition, Energim owns a private label, “vo2”.
Energim has a large sales hall in Herzliya, a store in Netanya and a new online commerce site. Retailers sees this deal as a significant strategic step in expanding its brand mix, entering new and complementary areas in the world of sports and in favor of its continued growth in both the domestic market and international development. Retailers has previously stated that it plans to open a number of stores in an innovative concept after the transaction is completed.
Converse may also operate in a retail channel
Regarding the deal with Converse, Retailers considers its selection as the official and exclusive distributor of the brand in Israel, and the expansion of its activity to a wholesale marketing channel, an important step in the realization of the company’s strategy. According to Retailers, the exclusivity agreement includes a commitment on its part to meet the minimum annual amount of purchase of products from Converse during the term of the agreement as well as the company’s commitment to marketing expenses at a set rate.
Converse, founded in the United States in 1908, is engaged in the design and marketing of footwear and leisure fashion. Its Allstar shoes are known worldwide in design and branding. Since 2003, Converse has been a subsidiary of Nike.
Under the Distribution Agreement, Converse may sell its products to its strategic and international customers to be defined and operating in Israel. Pursuant to the agreement, Converse will also be entitled to operate in the retail channel, but it was clarified that the parties intend to enter into agreements under which retailers will be granted marketing rights in the retail channel, ie rights to establish stores and a trade site.
Retailers: “Growing commercial space in Europe”
Retailers consolidates the Fox Group’s sports activities, and includes Nike stores in Israel, Canada and Europe, Pot Locker in Israel and Europe, and the Dream Sports brand.
Earlier this year, Retailers completed an initial public offering on the stock exchange at a value of NIS 2.5 billion, and currently the value on the stock exchange is NIS 4.6 billion.
Following the IPO, the holdings in Retailers are divided between the Fox Group (55.74%), the global Pot Locker chain (10%), the Phoenix-Excellence Group (7.55%), CEO Dovi Schneidman (3.85%), other institutional entities and private investors (22.86% ).
In the first nine months of 2021, the sale of retailers amounted to NIS 755.5 million and reflected a growth of 61.8% compared to the corresponding period last year. The company explained that the growth was mainly due to an increase in the chain’s retail areas in Europe (which began during 2020) and in Israel and an increase in sales during the period when the stores were open.
Retailers’ net profit fell by 8.7% in January-September to NIS 33.3 million. However, excluding non-recurring accounting financing expenses of NIS 18.3 million, resulting from the revaluation of an option to Leumi Partners (which was a shareholder in the company), net profit in this period increased by 41.6% to NIS 51.6 million.