Foot Locker is launching in Israel under a franchise run by Israel’s Fox clothing chain, which has promised that prices will be only 12 percent over those in the United States, Foot Locker’s home market. Yet a check by TheMarker of the shoe-store chain’s first two stores in Israel found price differences that far exceeded what Fox promised.
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Foot Locker’s first two stores in Israel are at the Azrieli mall Rishonim in Rishon Letzion and the Gindi Mall in Tel Aviv. Fox is planning to launch another 10 stores over the summer, at a total investment of 18 million shekels.
Foot Locker specializes in casual sportswear and sells brands including Nike, Adidas and Puma. Prices are not expected to be particularly low, but it is expected to offer exclusive designs. Many major sportswear companies offer designs exclusive to Foot Locker.
The company has 3,400 stores in 23 countries. Its operations in the Middle East are all run by franchises.
Prices in Israel range from 299 shekels for some of the Reebok shoes, to 900 shekels for a pair of Pumas designed by the singer Rihanna.
Harel Wiesel, CEO of the Fox group, stated, “Foot Locker Israel is more expensive by 10 to 13 percent on average than Foot Locker in the U.S., due to import duties,” referring to the 12 percent import duty imposed on shoes.
Yet TheMarker found price gaps that greatly exceeded this, with some shoes costing as much as 42 percent more in Israel than in the U.S.
For instance, Reebok’s Classic Leather shoes cost 349 shekels in Israel, versus 236 shekels in the U.S. – a difference of 32 percent. Puma’s Heart shoes cost 419 to 449 shekels here, versus 290 to 309 shekels in the States, a gap of 30 to 31 percent. And Vans’ Old Skool shoes cost 16 to 42 percent more in Israel than in the U.S. – 349.90 shekels in Israel, versus 200 to 291 shekels in the U.S. The different prices for a given shoe design in each country are due to different shoe colors.
Wiesel responded, “In order to buy shoes in the U.S. you also need to buy a $1,000 airline ticket, spend $400 on a hotel and pay another $100 for a taxi into the city.”
He added, “There’s no reason to charge 12 percent import duties on shoes in Israel, since there’s no factory manufacturing shoes here.”
The Fox Group added, “Foot Locker Israel is charging prices acceptable for fashion and sports chains in Israel, and even a bit less.”