Retail Chains to Battle Mall Owners

Senior executives from some of Israel's best-known chains secretly meet to forge united front.

A number of retail chains are planning to present a united front in their battles with mall owners and regulators. A number of senior executives from some of Israel's best-known chains met secretly recently on the matter with Uriel Lynn, president of the Israel Chambers of Commerce.

Among the 20 chains represented at the meeting were Hamashbir Lazarchan, Golf, Fox, Castro, Electra and Super-Pharm. Another meeting will be held next week and even more retail chains will be represented, including smaller businesses.

"The chains are being battered and every minute the malls put another burden on us such as higher rents, and management and license fees," said one chain owner who attended the meeting.

The owners are constantly talking about their daily struggles with the malls, especially with the so-called duopoly of Azrieli and Melisron. They accuse the malls of charging more and more as the chains' profits fall, and that the new international chains that recently arrived in Israel have received preferential treatment form mall owners.

In addition, owners charge that the malls often require the chains to open a store in an unsuccessful mall in return for space in a successful one. But chain owners have avoided organizing in the past out of fear of retaliation by the mall owners, said one executive.

The chain owners also want to open a training school for retailing and to organize toward working on such problems as high local taxes and fees. They also want the state to recognize working in the stores as "preferred work" for demobilized soldiers, which entitles them to state financial incentives.

The problem is that the various chains are often competitors with contradictory interests - and often a lack of trust between them. If they organize, they may have to reveal all sorts of trade secrets and financial data to help one another out, and that may be possible only if they feel their survival is in danger, said an industry source.