UK fashion company Next is considering opening a chain of stores in Israel.
Next launched a successful line of deliveries to Israel a few years ago. Its variety of clothing and easy prices have enabled it to gain a market share, and constitute significant competition for local fashion and clothing retailers.
Next's popularity in Israel is evident in a bunch of public opinion surveys recently conducted among various groups. It was among the top five among both online purchasers in Israel in general and young people and students. Next's annual sales in Israel are estimated at NIS 60-70 million.
The company has announced on its website that it is looking for local franchise holders for the purpose of opening stores in Israel. "Next has a growing number of international franchise stores in the Middle East, Europe, and the Far East with experienced retail fashion companies. If you are interested in a franchise opportunity with Next, contact us," the company's website announcement reads.
The introduction of Next's stores into Israel will put the chain into direct competition in the infant and children's clothing segment with not only foreign chains that have recently entered Israel, such as The Children's Place and Carter's, but also local players like Castro Model Ltd. (TASE: CAST), Golf & Co. (TASE:GOLF), Fox-Wizel Ltd. (TASE: FOX), and Shilav. The company also offers a broad selection of men's and women's clothing at relatively cheap prices, but in Israel, it sells mainly clothing for infants and children.
Will the prices rise?
On the one hand, the possible commencement of sales in Israel is likely to prove good news, since it will be possible to measure, examine, and feel the retail merchandise for the first time, instead of buying it only through the website, but this measure might pose a problem. If Next opens stores in Israel, it is likely to raise the prices of items on its website, or even completely halt online sales to Israel, so that its franchise holders will not have to fear competition from online sales. In this case, Israeli consumers are liable to come out on the short end, both because of higher prices and because ordering online is easier than going in person to a clothing store.
Next said in response, "The company is not planning on opening stores in Israel, but we offer a broad selection of items for online purchasing. The announcement that appeared on the Israeli page of our website is a declaration that we are looking for franchise holders, but there is a similar announcement on all of our international websites. That does not mean that we are planning to open stores in Israel; it gives an indication of the type of business partners we are looking for."
Published by Globes [online], Israel business news - www.globes-online.com - on January 5, 2016
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