Sources inform ''Globes'' that retailer Home Center (DIY) Ltd. is planning to launch private label paints to compete against Tambour Ltd. (TASE:TMBU), Nirlat Colors Ltd. (TASE:NRLT), and Jacobi Ltd.. The private label will be marketed under the "Home" brand name, and will be sold for 15-20% less than Tambour and Nirlat paints.
The sources added that Home Center has removed Tambour and Nirlat representatives from its stores, and that its own employees are providing service. Although store brands are very common in the non-food sector, they do not exist in the paint segment in Israel, and they are rare overseas. Home Center's plan is expected to increase competition in the paint market and lower prices.
Home Center CEO Raviv Brookkmayer said, "Home Center must take its strength in the DIY sector to create a competitive edge in the market. It's important that we offer consumers better value propositions and slightly change the hegemony of the two dominant companies in the market. A private label will bring about more competition and innovation. I assume that that it will cause the large paint manufacturers to try harder, come up with more innovations, and cause us to be more attractive on price."
Israel's paint market has an annual turnover of NIS 1.2 billion. A third of sales are to paints for industry and the rest are paints for households. Tambour has a market share of about 40%, Nirlat has 25%, and Jacobi is the third player.
Home Center's paint sales total NIS 60 million a year, and it plans for its private label to account for 15% of sales, and for this proportion to grow over time.
Home Center is owned by Fishman Holdings, whose owner, Eliezer Fishman, is the controlling shareholder in “Globes”.
Published by Globes [online], Israel business news - www.globes-online.com - on March 28, 2011
© Copyright of Globes Publisher Itonut (1983) Ltd. 2011