Avi Malka, the owner of the ML and Jump fashion chains, as well as Office Depot Israel, is fighting for his business, after the court issued a temporary stay of proceedings against Office Depot on Friday, following the motion for liquidation filed against ML and Jump the day before. Malka owes the banks and suppliers NIS 81 million, including NIS 68 million owed by Matim Li Ltd., which owns the two fashion chains. The three chains employ more than 1,000 people.
Malka says that, on Friday, he reached an agreement in principle with the fashion company's suppliers, under which NIS 42 million in debts will be rescheduled over five years. The debts of the fashion company to the banks total NIS 30 million. The documents that he is set to file with the court for the purpose of a debt settlement disclose the fashion chains' financial performance.
ML had a turnover of NIS 112.4 million in 2012. It had a gross profit margin of 61.9%, and an operating profit of NIS 5.8 million, or 5.2% of sales. Matim Li had high financing expenses (NIS 4.75 million), and a pretax profit of just NIS 1.1 million. Jump had NIS 62.3 million revenue in 2012 and an operating profit of NIS 2.98 million (4.7% of sales). Here too, because of its high financing expenses (NIS 2.1 million), its pretax profit was just NIS 869,000.
"On Friday, we convened a meeting of the fashion chains' creditors and obtained broad support. In the resulting situation, we believe that we've taken control of events. The stores are working and will on Sunday, and there is a majority in favor of a creditors' settlement. At the same time, we've drawn up a proposal, which the banks have approved in principle," Malka told "Globes".
Published by Globes [online], Israel business news - www.globes-online.com - on October 27, 2013
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