BUSINESS
FOR
SWEETEST DAN
DiAmoNds
FROM 900 0°
Canion Ayalon Israel's
Revolutionary Shopping Mall
JOEL BAINERMAN
Special to The Jewish News
T
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Highway, Southfield, MI 48034
1-1OURS-. Monday thru Friday 10 - 5130, Saturday 10 - 5
"SUNSET STRIP" 29536 No
PI-kONE: 357-4000
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PICK-UP a DELIVERY AVAILABLE
MON-FRI 8:00 TO 5:00 - SAT 8:00 TO 12:00
and Mirrors
27 YEARS
SAME LOCATION
626-9007
32671 NORTHWESTERN HWY.
Two locations to serve you
BERKLEY • 547 - 1214
54 FRIDAY, OCTOBER 13, 1989
o a population used
to shopping in small
local stores or Middle
Eastern-style open markets,
the opening of the Canion
Ayalon Mall in the Tel Aviv
suburb of Ramat Gan three
years ago sparked-off a
revolution in Israeli shopping
and consumption patterns
and set new standards for
retail merchants and chain
stores.
Testifying to its success is a
recent survey of merchants in
non-shopping mall locations
in Tel Aviv and Ramat Gan.
Sixty-five percent of those
polled said they are no longer
satisfied with the location of
their stores, 48 percent are
seriously considering moving
their businesses to a mall and
46 percent said sales have
plunged since the Canion
Ayalon opened. _
The Canit Co., which built
the Canion Ayalon, has in-
vested nearly $20 million in
the project. From the start,
they believed such a large-
scale commercial project in-
tended solely for rental was
going to be unique in Israel.
Sar-Shalom , Siran, the
general manager of 'Canit,
says the biggest difference
between malls in North
America and Israel is that in
Israel, the mall's manage-
ment plays a far bigger role in
supervising shops and giving
instructions on pricing,
marketing and customer
service.
The mall's turnover is
about $120 million a year and
sales of merchandise at the
stores are continually
increasing.
Canadian developer David
Azrieli designed the Canion
Ayalon. "Canion is a Hebrew
word that we invented — a
combination of Iniya' (buy-
ing) and lenyion' (parking),"
he said. "In order to change
the concept Israelis had of
shopping, we had to find a
word to replace the 'Supers'
the public had come to
associate with shopping."
Canit is in the final plann-
ing stages of building a shop-
ping mall, similar in scale to
Canion, in Beersheva, the
capital of Israel's Negev
Desert. The largest of all
Canit's projects is its planned
shopping center in
Jerusalem. The net built-up
areas will be twice that of Ca-
nion Ayalon — more than
35,000 square meters. Canit
is investing $75 million in the
two projects.
A third, $5 million center
will be built in Eilat in
Israel's most southern city on
the shores of the Red Sea.
Another developer is
building yet another shopp-
ing center called Canion
Hasharon in Netanya, a
coastal town a half hour's
drive north of Tel Aviv with
130,000 inhabitants. The $50
million project will span
40,000 square meters on four
levels. When opened within
the next two years, it will
have space for 450 cars, four
cinemas, eleven restaurants
and a water fountain.
Shopping malls are indeed
profitable in Israel. Canit ex-
pects proceeds to reach $120
million this year from Canion
Ayalon, a 35 percent increase
compared with the previous
year. These returns exceed
the mall's original sales
forecasts — which called for
such a turnover within three
to five years of opening. In the
past year alone, seven million
visitors have frequented the
mall — 20,000 on a daily
basis.
Since Canion Ayalon open-
ed its doors, shopping mall
projects have • appeared in
droves. Eleven exist today and
nine more are in the planning
stages.
One of the reasons for the
boom in malls in the last few
years has been the high price
of purchasing retail outlets.
Another is the fact that for
builders and investors, a mall
is a good, long-term invest-
ment which appreciates well
against Israel's hyper-
inflated economy.
Factors working against the
mall phenomenon include
Israel's small population of
four million, skyrocketing
land prices, zoning costs and
interest rates.
Shiran believes that a mall
in Israel needs a base of
100,000-150,000 consumers
to be a success. Yet he points
out that once the market for
larger markets becomes
saturated, it will be time to
move downstream to the
smaller plazas designed to
serve smaller communities.
Another problem is that
Israel lacks many anchor
stores. The country has only
two department store chains,
Hamashbir and Shekem, and
two supermarket chains, Co-
Op and Supersol.
"The success of the Canion
Ayalon Mall is an expression
of the public's satisfctiori,"
Shiran says. "The combina-
tion of shopping and family
entertainment signifies a
radical departure in _lifestyle
beyond the change in com-
mercial methods."
❑
Mutual Fund
Available
An Israeli mutual fund
designed for foreign residents
has been authorized to diver-
sify its portolio while pro-
viding tax-free income to
investors.
The only mutual fund
established in Israel for non-
residents, the "Ankor Fund"
of the Bank Hapoalim Group
is expanding its investment
range to include corporate
bonds linked to the cost-of-
living index and/or foreign
currency market, as well as
interest-bearing foreign resi-
dent bank deposits, it was an-
nounced this week. Until now
it was confined to the acquisi-
tion of shares traded on the
Tel Aviv Stock Exchange.
The Controller of Foreign
Currency has approved the
expansion of the Fund's in-
vestment range while freeing
its foreign participants from
taxes on profits realized. Such
profits are reflected in the
vlaue of "Ankor" shares
which increased in dollar
terms by 32 percent during
the first eight months of
1989.
With assets of $30.4 billion
and 313 branches in Israel
and 13 other countries, Bank
Hapalim is Israel's largest
banking group
ENN ■ I IN BRIEF
1
STEVEN LEMBERG has
been named a partner in the
Steven Lemberg
Detroit office of Coopers and
Lybrand.