Fox-Wizel Ltd. (TASE: FOX) today officially launched the American Eagle Kids fashion chain, after 11 branches were simultaneously opened this month. $350,000 was invested in the branches, which were opened in American Eagle stores.
The new chain is a venture of American Eagle Israel, in which Fox-Wizel is a 50% partner. For Fox-Wizel, the venture is an expansion in children's sizes, in addition to Fox Kids and the The Children's Place chains.
According to Fox-Wizel co-CEO and co-controlling shareholder Harel Wizel, "These are the first signs of the partnership between Fox-Wizel and American Eagle. We have started a pilot with 11 stores. We'll wait one season, and decide whether to continue the partnership with the US company."
"Globes": You seem to be taking an enormous risk with the cannibalization of Fox Kids and The Children's Place.
Wizel: "I estimate the children's clothing market in Israel at nearly NIS 4 billion. There are 30 players, so if someone gets hurt, everyone will. Even if American Eagle sells NIS 50 million a year or NIS 100 million a year a few years from now, the damage can amount to 1-2% of the children's clothing market, and this is a competitive market. The opening of The Children's Place didn't affect Fox Kids, and we don't think that anything different will happen."
American Eagle Kids is an initiative of Fox-Wizel, after the global American Eagle company authorized the creation and design of the brand. American Eagle was formerly active in children's fashion through the Kids 77 brand, but exited this sector after selling the brand.
American Eagle VP - Asia Pacific & Global Country Licensing Kareem Gahed said, "There will definitely be an American Eagle Kids in the world. We're waiting to see first how it goes in Israel."
"Globes": Will the global children's brand be launched in cooperation with Fox-Wizel?
Gahed: "The brand was created here because of the partnership with Fox-Wizel, but globally it depends on other factors. As of now, American Eagle US isn't involved in it, and the question is to what extent it will want to be involved."
You already had a children's brand, but you got rid of it.
"The mistake with Kids 77 was that the brand was separate. American Eagle Kids is very similar to American Eagle's DNA."
Published by Globes [online], Israel business news - www.globes-online.com - on March 22, 2016
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