“Globes” has learned that Hamashbir Fashion Warehouses’ management is about to institute radical changes in the way the chain operates. Following recommendations by a strategic consulting firm, the company made a decision to examine the possibility of cooperating with Sweden's H&M, an international fashion and cosmetics chain.
H&M is a public company listed on Stockholm’s main stock exchange. The company was founded in 1947 and today operates 680 stores in 14 countries in Europe and the US. In 2000, the company’s sales totaled $3.5 billion.
H&M has so far not expressed any interest in the Israeli market and it is difficult to assess the chances of such an attempt by Hamashbir, particularly since various Israeli chains have unsuccessfully tried to co-opt international groups as strategic investors for years.
For a local fashion chain, the advantage of belonging to centralized international procurement source benefiting from economy of scale, is limited in light of the opportunities presented by cheap Far East manufacturing.
Hamashbir Fashion Warehouse sources confirmed the report. The chain consists of 20 branches and is regarded as one of the sector’s most successful. The sales turnover is expected to total NIS 400 million, about 6% of Israel’s fashion market.
Published by Israel's Business Arena on 27 March, 2001