Delta Galil Industries Ltd. (Pink Sheet: DELTY; TASE: DELT) is planning to open seven more stores of the Fix underwear chain this year. The company aims to double the chain's sales to NIS 40 million within a year, sources inform "Globes."
The Fix chain has nine branches, each covering 70 sq.m. Its annual sales turnover totaled NIS 20 million in 2016.
This accelerated expansion means that Fix's business performance is up to expectations. The sources added that the company is now considering opening up an overseas chain of the Fix brand.
Delt Galil completed its acquisition of the Fix chain in January 2014 as part of its acquisition of Lodzia Rotex from Argaman Industries Ltd. (TASE: ARGM) for NIS 7.5 million. The deal included the Veto and Fix brands, and the stores in the Lodzia Rotex chain.
The chain was acquired following a serious decline in its performance, following which Lodzia Rotex considered closing down all its branches. Delta Galil closed down the chain immediately following the acquisition, and converted some of its stores to Delta stores.
"A completely new Fix chain"
In May 2015, Fox launched a chain of stores under the Fix brand appealing to young people, with significant differentiation from the Delta chain. The chain was projected to reach deployment of 15 stores within a year. Delta Israel head Zvika Shwimmer says that the chain has potential for dozens of stores. He adds, "The entire Fix chain is completely new, and it appeals to a new market. We want to be the leader in this category."
"Globes": You aren't worried about cannibalizing the Delta chain?
Shwimmer: "Delta's target market is more of a family market, with very clear positioning for women, men, and children. Fix appeals to young women, with a focus on lingerie. The main market is the 15-25 age bracket. We also have a large group of 13 year-olds who come to the stores. The entire collection at the Fix chain is designed to be very close to the current global trends. We're developing merchandise within 60 days."
Are you filling a vacuum?
"No, but we entered a market with few players and many customers. In general, this category has Aerie and H&M. We'll be in all the main shopping malls."
What do you know that Lodzia Rotex didn't know when they had the brand?
"I don't want to talk about what they didn't know; I want to talk about I believe that the market needs, and what Delta Galil can provide. The market needs a trendy brand of lingerie that can bring the best goods to young people looking for the product."
Published by Globes [online], Israel business news - www.globes-online.com - on January 1, 2017
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