Declares War on Dactlon: Fox launches its own new sporting goods network

The fashion group will set up a new network called "Just Sport" that will compete with the old players in the industry like Mega Sports • This is the first time in years that the Fox group has developed its own independent network

Fox Group is on the way to establish a new Israeli sports network - the Globes have learned. The Harel Wiesel public fashion group will develop a nationally-branded multi-branded network under the name "Just Sport" for professional sports brands.

The new network will open under the ownership of subsidiary Retailors, managed by Dobby Schneidman, which the group developed over the past year. The concept of the network will be built inspired by sports networks around the world and will include sports products for both athletes and amateur trainers. This allows the group to enter a new field and compete with veteran actresses such as Mega Sport and even in the French Dectlon, which today only markets its discounted home brand.

It is also learned that the chain's first store is expected to open in about two months in Rishon Le-Zion at G complex near Cinema City. It will include one storey for men and one storey for women and children in an area of ​​800 square meters. In all, the new store will offer six categories: running, training, soccer, basketball, lifestyle and surfing.

It is estimated that four more stores will open in the coming year.

Fox's traditional activities are in the fashion field, but over time it has diversified its portfolio. In recent years, it has expanded mainly through acquiring companies like Integrated or acquiring franchises for international brands such as Urban Outfitters.

However, in light of the erosion of fashion revenues, Fox has already several years ago included in its portfolio also sports activities, which is growing both in the world and in Israel. The number of sports practitioners is growing, as is the infiltration of sportswear into the daily wardrobe.

This is the first time the group has been developing a physical store chain independently since the founding of the Fox fashion brand, which has also expanded into home fashion under the name "Fox Home". Most of the networks it operates are franchises of international companies or acquisitions of Israeli companies over the years. Also, two and a half years ago, the group set up an online trading platform - Terminal X.

Fox already operates two sports chains in Israel - Pot Locker, an international shoe chain focused on fashion items (through a franchise) that markets sneakers of a variety of brands; And the Nike chain in Israel, which sells branded products that include both fashion and trainer and athlete items.

Fox now seeks to enter a new field - professional sports, through its own multi-brand network. In recent years, due to the erosion of fashion revenue, veteran department stores have also massively expanded the areas designated for sports clothing.
Consumers are looking for a shopping experience

Today, the local market is divided into several arenas: brand stores such as Nike, Adidas, Reebok, Vance, Skechers or Columbia. Looking at brand sales (retail and wholesale) similar to the world, in Israel Nike is also the leading sports brand with about 40% of the market, followed by Adidas with about 27% of the market, according to industry estimates.

As far as multi-brand stores are concerned, Mega Sports estimates that it holds about 10% of the market, along with Pot Locker, which holds an additional 10%. Nike and Adidas each hold about 7% of the retail market (not including the outlet), which breaks down the consumer by about 4%, and Ductlon and Alital each hold 3%.

However, contrary to the innovative and updated visibility that exists today in brands of brands such as Nike and Adidas, the multi-brand stores that exist in the local market for the most part look and feel like a visit in the past.

In recent years, thanks in part to the open sky reform that has increased the frequency of Israelis visiting abroad, access to international networks has expanded and deepened, so that the Israeli public is exposed to the shopping experience they can enjoy, and the local market has not yet adapted.

In addition to the shopping experience, another significant issue in this regard and the willingness of the Israelis to do their shopping is the significant pricing gaps. In that regard, it remains only to wait and see how well Fox will be able to respond.
Leumi may be a partner in this activity

Last month, Fox reported contacts to sell 10% of Retailors, the subsidiary that now establishes the network, to Leumi Partners, the investment arm of Bank Leumi through the acquisition and allocation of shares, at a company value of NIS 600 million.

Retailors owns franchises for sports networks operated by Fox, including Pot Locker and Nike. As progressive negotiations between the parties mature, Leumi Partners is expected to invest NIS 60 million for retail shares.

Retailers currently operates 22 Nike stores in Israel and 52 stores of the Pot Locker chain. In addition, the group operates 7 Nike stores in Canada, and has reported contacts to expand this activity to Europe as well.

Fox, which is worth NIS 2.27 billion, recently posted a positive third quarter. In the first nine months of 2019, Fox's revenues grew at a similar rate (about 35%) to NIS 1.9 billion, and its net profit jumped nearly 80% to NIS 168 million.

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