Is the franchise agreement of Fox With Greek jumbo in jeopardy? The public fashion group, which is under control Harel Wiesel, Published last weekend late at night a clarification regarding the franchise agreement it signed with the discount product giant from Greece.
The clarification, given following the Securities Authority’s intervention, reveals that the agreement with Jumbo depends on Fox being able to use the brand’s trademark, and that it may have a dispute over this with an existing competitor with a similar name. At the same time, two class action lawsuits were filed against the group for delaying reporting the concession.
The Securities Authority contacted Fox in order to find out the difference between the date of signing its agreement with Jumbo (in July) and its reporting to the Tel Aviv and Greek stock exchanges (September). In the background, the timing of the publication – shortly after the competitor’s IPO Max Stock, Which is under control Apax Foundation, On the Tel Aviv Stock Exchange at a higher value than expected, of NIS 1.7 billion.
The Authority sought to investigate the reason for the delay in reporting, and required Fox to provide investors with information that was missing from the first report, which clarifies that the use of the Jumbo trademark in Israel is a condition precedent for the completion of the transaction. The clarification issued by Fox reveals that Jumbo has filed an application to register its trademark, which is open for opposition until September 30th. In addition, it notes that after filing its application, another company filed an application for trademarks that include the name Jumbo. The person who submitted the application is another company that specializes in discounted products, under the name Jumbo Stock, and operates ten stores in Israel.
However, it turns out that Greek Jumbo and Jumbo Stock are not the only ones. A “Globes” survey shows that in addition to these two, other players operate under the name Jumbo: the Jumbo Design chain, which operates in the Arab sector as a discounted stock retailer, and another store under the name Jumbo Jack in the Or Yehuda Mall. As far as is known, none of them registered the name Jumbo as its trademark.
Max Stock: “No significant impact expected”
In addition to the issue of delay in reporting, there were those in the market who criticized the proximity of the report to the successful issuance of local competitor Max Stock, which is controlled by the Apax Fund, which is led by Israel Zehavit Cohen. The issue was carried out at a very high value, which reflects great optimism on the part of investors in the stock market regarding the future of the company.
It is not inconceivable that if he had known about the competition that was brewing for Max Stock before the IPO, it would have affected its pricing – and probably not positively. By the way, Max Stock stated after the publications in the matter that the company had no prior knowledge of the matter, and that “this is not expected to have a material effect on the company’s activities.”
And there are those who did not wait for clarification: Thus, two applications were filed for approval of a class action lawsuit against Fox in claims related to the date the company reported the transaction. According to the plaintiffs in both applications, the company had to report the contract in the transaction at the latest upon signing, and the reporting date caused damage to anyone who sold shares of the company between the date of signing the transaction and the date it was reported.
Fox states in its report that the company is studying the requests through its legal counsel, and that “in the company’s and its counsel’s position, the delay in reporting and the reporting date have complied with the law.”
Earlier this month we reported that Fox had signed an agreement to operate the discounted Greek department store brand Jumbo in Israel. Fox updated that as part of the agreement, it is expected to open the brand’s first store in Israel no later than 2021, and that the cost of the investment is estimated at NIS 15-18 million per store. This is an exceptional investment in retail terms, in part because these are huge stores, which will cover an area of 9,000-10,000 square meters.
Fox signed the deal with Jumbo in July, but only reported in September
July 24 – Fox signs agreement with Greek jumbo
September 14th – The issuance of Max Stock on the Tel Aviv Stock Exchange
September 15th – Fox reports signing agreement with Jumbo
September 24th – Fox adds clarification following a request from the Securities Authority
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