Israeli consumers will soon witness the advent of a new low-cost shopping alternative, in the form of a local version of the Irish apparel chain Primark.
The Israeli incarnation, Pricemark, will sell low-priced clothing that is designed by a team of Israelis and Canadians based in China and also manufactured there. Carolina Lemke Group, a designer and retailer of sunglasses that operates the local Hoodies and Top-Ten chains as well, is investing as much as 100 million shekels ($29.2 million) in the venture.
“The idea is to sell the latest fashion and highest quality at prices that, unfortunately, Israelis now only enjoy in the open-air markets,” CEO Yossi Gavison told TheMarker. “We will operate at very low operating profits, but our sales will be very, very high and that will compensate.”
Although their cost of living remains high compared to that in the United States and Europe, Israeli consumers have begun enjoying something of a price revolution lately, with Cofix shops offering 5-shekel cups of coffee, El Al Airlines introducing its UP low-cost carrier, and cellphone costs slashed after the market was opened to wider competition just over two years ago.
Pricemark will operate shops of 2,000 to 4,000 square meters in size, featuring men’s, women’s, children’s and baby’s apparel as well as handbags, underwear, cosmetics and accessories. The premises are quite large by local standards: The biggest store in the H&M Israel chain, for instance, is just 2,400 square meters.
Unlike other apparel discounters, Pricemark will open its branches in high-priced shopping centers, with the first outlets slated for Tel Aviv's Azrieli Mall and Be’er Sheva’s Negev Mall. Gavison said he planned to open six to eight shops in 2015-2016, starting with the Be’er Sheva outlet next April.
Arnon Toren, CEO of Azrieli Malls, said he believed the new chain would have a major impact on local fashion retailing, comparable to the entry of the U.S. discount chain Forever 21 in Israel.
“It reminds us of Forever 21’s debut," Toren explained, "but this time it will be something much bigger because Pricemark will have more locations, lower prices and a bigger selection. It could be a huge success. We’re exploring opening outlets in Haifa and other places.”