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Just E. of Telegraph

Bloomfield Hills

After filing for bankruptcy, an Israeli swimwear
manufacturer is struggling to stay afloat.

JUDITH SUDILOVSKY SPECIAL TO THE JEWISH NEWS

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n a June 1995 article, Gideon
Oberson, one of Israel's top
three swimwear firms, boast-
ed that he had no competitors.
Whether or not that is true, Mr.
Oberson has since learned that
competition is not the only factor
that can ruin a business.
Against the backdrop of a local
and international depression in
the fashion industry and partic-
ularly for swimwear manufac-
turers, including Gotex, Mr.
Oberson has been battling to stay
in business for a variety of rea- ,
sons.
Since the beginning of 1996,
Mr. Oberson has lost some $2
million on his swimwear line due
to management and production
problems that hindered Gideon
Oberson Fashion Industries
Ltd.'s ability to meet interna-
tional demands. In addition, the
company devised a five-year
scheme to increase business in
the United States two years ago,
but due to bad management, the
proposed plan could not be im-
plemented.
Earlier this year, when the
troubles began to loom ominous-
ly, Mr. Oberson decided to fire
manager Moti Gilo. But despite
the firing and Nazareth swim-
wear manufacturer KLil Yofi's $2
million purchase of the right to to
produce Mr. Oberson's creations,
Gideon Oberson's business is still
wading in treacherous water.
Recently, the company was
forced to file for Article 233, the
Israeli equivalent of America's
Chapter 11 bankruptcy status,
which temporarily protects the
company from creditors.
And, before the end of the year,
Mr. Oberson's creditors will eval-
uate the company's progress and
vote on whether or not to allow it
to continue operating. Right now,
Gideon Oberson said he has the
support of 83 percent of the cred-
itors and all he needs to stay in
business is 75 percent.
Despite the impending deci-
sion, Mr. Oberson speaks confi-
dently about the future and his
joint production deal with Mil
Yofi which is, perhaps, Oberson's
best hope. As textile industry ex-
perts maintain, the only Israeli
clothing manufacturers who will
be able to survive are those who
employ the best technology to
produce mass quantities of high-
quality goods that will be at-
tractive to leading international
retailers.
Countries such as India, Jor-
dan and Turkey lack Israel's
ability to design sophisticated
products, but will always be able

to undercut Israel's prices for low-
er-quality goods due to signifi-
cantly lower labor costs.
According to the deal, Mr.
Oberson will still be in charge of
designing bathing suits, but Mil
Yofi, which produces its own
swimwear under the label of
"Pilpel" to the tune of $18 million
per year in Israeli sales and $13
million in exports, will produce
Mr. Oberson's designs with its
modern laser cutting machines
which can cut 20,000 pieces per
day.
"I'm very sorry for the last year,
but I'm still working," said the
perennially optimistic and seem-
ingly unscathed Mr. Oberson, 53,
who has completed his 1997 line
and is currently designing a line
of bathing suits for the 1998 sea-
son. Sitting at the square, heavy
wooden table in his elegant office
above the exclusive Mr. Oberson
Fashion House boutique in Tel
Aviv, the veteran designer,
dressed in loose-fitting, dark
green slacks and a light green
shirt, looks as cool and calm as he
acts.
But the ordeal has no doubt
taken its toll. After the agreement
with Klil Yofi was signed, Gideon
Oberson shut down his Ramat
Gan operation where he had em-
ployed 140 people. All but 20 of
his former workers have gone to
work for the No. 1 selling swim-
wear company, Gotex. Now Mr.
Oberson maintains a showroom
at Ramat Gan where they will
produce the sample line.
`The reason I felt that working
with Kill Yofi would be great from
the first moment is because of
their production method," Gideon
Oberson said. "As a designer, I
am working with someone who
can produce my designs with no
problems, either with money or
with workers. The price of each
item will be reduced by 20 per-
cent to 25 percent, which will dou-
ble the demand since demand is
based on price."
An Oberson suit currently
costs about $85 in Israel and $90
abroad.
Born in Italy after his parents
fled from Nazi Yugoslavia, Gid-
eon Oberson did not set out to be-
come a swimwear designer.
When he finished design school
in Paris in the early 1960s, he
was interested in designing haute
couture for individual customers.
In 1964, he opened his Tel
Aviv, and still operating, fash-
ion house where upper class
women, many from abroad,
would come twice a year to have
him design their wardrobe.

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