British department store chain Debenhams, one of Europe’s largest, is about to purchase 25% of Hamashbir Lazarchan. “Globes” has learned that the move will take place after Hamashbir merges the Gallery chain (Shekem Gallery), through acquisition of all current shares from shareholders’ Jack Benishu (60%) and Gershon Salkind (40%). With the entry of the international chain as a partner in the consolidated chain, the name of the Israeli chain will be changed to the international brand.
The deal is likely to total NIS 100 million.
Changing the name of Hamashbir Lazarchan will enable it to be active in the Palestinian Authority and Arab countries, in partnership with the international chain. Hamashbir Lazarchan general manager Yaakov Ginsburg confirmed the report.
”It will be the first time a strategic international partner enters the retail sector in Israel,” Ginsburg noted. “I assume they discovered potential in Israel. To date, all the retail chains in Israel spoke of bringing in strategic international partners, but no-one managed to pull it off.”
According to Ginsburg, Debenhams’ entry as a partner in Hamashbir Lazarchan will give the consolidated Israeli chain logistic and marketing know-how on running department stores. It will also significantly improve the level of products and prices the chain offers in all departments, including clothing, footwear and household items, and enable the chain to benefit from access to additional procurement sources and display private fashion brands.
The Debenhams is regarded as on of Europe’s most profitable chains. Operations total 1.5 million pounds sterling a year. The chain operates 100 branches in Britain, Scandinavia, Hungary, Kuwait and Dubai.
Hamashbir Lazarchan is controlled by the Co-op cooperative (80%), which acquired control of the Blue Square Properties and Investments chain at the beginning of 1999 for NIS 230 million, based on a company value of NIS 300 million, excluding Shekem Gallery.
The sales turnover of the consolidated chain is expected to total an annual NIS 2 billion. The chain will consist of 36 branches: 25 Hamashbir Lazarchan and 11 Gallery.
Published by Israel's Business Arena on 5 October, 2000