The long lines outside the Ikea stores in Netanya, Rishon Letzion and the Tel Aviv Port on Wednesday caused many to wonder why the furniture and housewares chain was given Health Ministry approval to reopen. After all, malls were still subject to coronavirus lockdown orders.
An investigation by TheMarker shows that in 2018 the owners of Ikea Israel contributed 2.4 million shekels ($790,000 at current exchange rates) to the Ger Hasidic sect, to which Health Minister Yaakov Litzman belongs.
That followed donations of hundreds of thousands of shekels annually in previous years, though Litzman denies any linkage to the lifting of the lockdown on Ikea.
Under Israeli law, nonprofit groups must report donations topping 100,000 shekels.
Furniture retailers were among the stores that received the go-ahead last week to reopen, but the fact that the approval included Ikea has raised eyebrows. Its giant stores cover tens of thousands of square meters, making them no smaller than many malls that remain closed.
The go-ahead also enraged the owners of apparel, footwear and toy stores, all of which have been barred from reopening whether they are in malls or otherwise. The Health Ministry let Ikea stores open because they were put in the same category as any store on a city street.
Litzman, one of Ger’s leading figures, accepted the health portfolio only after receiving the approval of the sect’s leader, known as the admor of Ger.
Shulam Fisher and Matthew Bronfman, the partners who control the Israeli franchise of the international furniture chain, have in recent years contributed 3.9 million shekels ($1.1 million) to the Ger Hasidim, not counting this year and last. That made them among the biggest contributors to the sect.
Between 2014 and 2016, they donated more than 283,000 shekels, and in 2017, through three different companies they control, more than 1 million shekels.
In 2018, when Fisher and Bronfman’s contributions jumped, the amounts included 1 million shekels from the Fisher-Bronfman-controlled Northern Birch, the company that controls Ikea Israel, to United Ger Institutions, an umbrella organization that raises about 100 million shekels annually for the sect.
That year, MBASF Management Ltd., a company controlled by the partners, gave another 360,000 shekels to United Ger Institutions. Another company, Shefa Success Logistics, which runs Ikea’s shipping and distribution operations as well as its online sales, gave 740,000 shekels to United Ger Institutions.
In addition, Fisher personally donated 362,000 shekels to the Ger sect.
Litzman the minister since 2015
The link between the Ikea partners and the Ger leader goes beyond donations. For many years, the admor has spent his annual vacation at a large private home on Ahari Street in Safed’s Old City that belongs to Fisher. The admor is one of the few people privileged to stay at the house (since the death of the so-called admor of Erlau, who also stayed there).
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The admor of Ger vacations there with his family and aides for more than a week every summer in the stretch between Tisha B’Av and the resumption of yeshiva studies at the start of the Hebrew month of Elul (usually in August).
Ikea is not alone in making donations in the tens of thousands of shekels each to various Ger institutions since Litzman became health minister in 2015.
Tempo Beverage, whose products include Maccabi beer, gave 1.2 million shekels to the Ger World Center, a nonprofit that managed the sect’s study hall before being merged with United Ger Institutions two years ago. Sano, a maker of cleaning products, gave Ger institutions 600,000 shekels, and Schestowitz, an importer of cleaning and personal care products, donated 220,000. Strauss Group, one of Israel’s biggest food makers, gave 100,000 shekels.
Retail industry sources estimate that Ikea’s turnover in the first three days after it reopened Wednesday reached 5 million shekels. This week, its turnover is expected to be double that.
Litzman denies the allegations that the reopening of Ikea was motivated by donations to his religious group. “There is no connection between Fisher and Litzman, and attempts to link them during a state of emergency are cynical and ignorant,” his office said in a statement.
Over the weekend, Litzman, whose management of the coronavirus crisis has come under criticism, told Prime Minister Benjamin Netanyahu that he wanted to step down in favor of taking over the Construction and Housing Ministry in the government currently being formed.
Ikea also denied any linkage. “We strongly reject any claims suggesting we applied any sort of pressure. Needless to say, Ikea follows the guidelines of the Israeli government and the regulations of the Health Ministry, under which we opened stores in Rishon Letzion, Netanya and the Tel Aviv Port,” it said.
A shopping center or a store?
Ikea’s actions during the coronavirus crisis have raised questions. In the middle of March, stores and malls were still allowed to open if they let in no more than 100 customers at a time. Ikea stores should have closed because they are designed to hold thousands of shoppers at a time, but Ikea said it could remain open because it was deemed a shopping center.
Last week, however, when Ikea reopened while malls remained closed, Ikea reversed itself and said it operated furniture stores, not shopping centers.
Asked on Thursday to comment on that, the Health Ministry said it considered Ikea a furniture store.
Asked who is responsible for making the designation, the ministry said in a statement: “In accordance with the amendment [the pandemic directives] issued on April 19, a store whose main business is selling furniture may open, subject to notifying the local authority before resuming operations. It is the responsibility of the local authority to supervise it and ensure that the store meets the conditions in the directives.”
In an interview with a local media outlet over the weekend, Health Ministry Director General Moshe Bar Siman Tov denied that there was any connection to donations and Ikea’s reopening. He noted that Litzman was in quarantine and did not take part in the approval process.
But Bar Siman Tov said it was a mistake to open Ikea stores in the first phase of easing a lockdown. “It’s more of a mall than a housewares store,” he said.
Ikea has operated in Israel since 2001, leading the local furniture retailing sector with an annual turnover of 1.3 billion shekels last year. Some 4 million shoppers visit the stores every year.
More than a month ago, the chain was slated to open its fifth store in Israel, near the city of Beit Shemesh near Jerusalem. But the opening was delayed due to building violations. Ikea operates four giant stores in Netanya, Rishon Letzion, Be’er Sheva and Kiryat Ata. The first two opened last week after being shuttered for a month, as did the smaller Tel Aviv Port outlet, which only sells kitchen cabinets and related accoutrements.
Ikea has also become a favorite place for ultra-Orthodox shoppers. Its stores do not open on Shabbat, its restaurants are strictly kosher and every location has a synagogue.