Marks & Spencer chairman Richard Greenbury is no stranger to Israel. For the past 25 years, Greenbury has been coming once or twice a year, to meet with his Israeli suppliers. In the world of Marks & Spencer, by the way, Israel is a major country, the largest supplier to the chain.
Marks & Spencer buys textiles, fashion and food from Israel to the tune of 200 million Stg per year. A significant part comes from veteran suppliers Delta and Bagir. For foods, it’s Pardess, Elite, Carmel Mizrahi and others.
Israel’s textile sector is a difficult one; its existence is questioned on a daily basis as factory after factory collapses. Against this background, the choice of Israel as a major Marks & Spencer supplier is surprising. The Far East or Eastern European alternatives are far lower in cost. But Greenbury is absolutely confident in his choice. He points out that every year Marks & Spencer increases its orders from Delta, Bagir and others, such as Triumph. "Price is not our only criterion", he says. "There are many retailers in search of value for money. Clients are looking for innovation, creativity, fashion. You’ve got to be competitive, but not necessarily the lowest cost. You can’t live from low costs alone".
Greenbury cites the Far East as an example, where many countries were built on cheap textile products. "Now they’re in trouble. Their clients want more than low prices", he says.
Greenbury does not view Delta’s strategy of moving manufacturing to Egypt as very significant, at this stage. Yes, turnover is already in excess of $15 million, but Greenbury says the real results are long-range ones. Technology and training in Egypt is not very advanced, at present, but in his estimation, future cooperation between Israel and other Middle Eastern countries has vast potential in the world textile market.
Greenbury arrived for this interview directly from a meeting with Prime Minister Benjamin Netanyahu. At this meeting, he reviewed Marks & Spencer’s activity in Israel, but did not go into the difficulties facing Israeli exporters due to the economic situation. As head of the Israel-Britain Business Council, Greenbury presented the trade situation between the two countries before Netanyahu, and Minister of Industry and Trade Natan Sharansky.
In 1996, exports from Israel to Britain were $1.3 billion, compared with $1.1 billion in 1995. Imports from Britain to Israel were $2.6 billion, compared with $2.3 billion in 1995. However, Greenbury noted, in 1997 there was a drop in the volume of trade conducted by British companies in Israel. He attributed the decline to fear of the economic situation. In addition, he did not deny the political situation was worrisome. "I believe this was a partial influence on small and medium-sized companies".
Marks & Spencer, with its 8 billion Stg annual sales turnover, operates some 250 stores all over the UK. In addition, the chain has 35 stores in Europe and 10 in Hong Kong. Franchises operate in 20 other countries around the world. Several years ago, an agreement was signed between Marks & Spencer and Hamashbir Lezarchan owner Blue Square Properties (the Co-op chain), to operate stores within Hamashbir stores. A separate Marks & Spencer store operates at the Ayalon Mall in Ramat Gan.
Greenbury’s present visit to Israel resulted in another agreement with Blue Square, to set up a Marks & Spencer chain in Israel. Hamashbir will operate the stores as a separate chain and, for the first time, sell the full range of Marks & Spencer products.
This also marks one of Greenbury’s last trips to Israel as Marks & Spencer chairman. After ten years in the post, he intends to retire shortly. However, his Israeli suppliers are confident that the bonds created with the British chain are strong, so activity is expected to continue to grow in the coming years.