Castro buys 50 percent of Urbanica for NIS 90 million

Israeli retail fashion chain Castro Model Ltd. has notified the Tel Aviv Stock Exchange that it has signed an agreement to acquire a 50% stake in low-cost fashion retail chain Urbanica for NIS 90 million at a company value of NIS 180m. Castro plans to integrate Urbanica into its own chain.

Globes was the first to report the imminent acquisition last month, shortly followed by confirmation of the negotiations by Castro.

The ownership structure of the Urbanica chain, held by Palo Retail, is similar to that of the Hoodies Group, in which Castro bought a 25% stake four months ago. One difference is that a Canadian partner has a stake in Hoodies but is not registered as a shareholder in the Companies Registrar.

Like Hoodies, Urbanica has many partners, including Yossi Gabison, who heads the Hoodies Group with a 31% stake, and Eli Gabi (21%). Other partners include Oren Bar-Gil, Nitzan Israeli and Mariano Karp. Model Bar Refaeli and her mother, Tzipi, hold 2% and 1%, respectively, of both Urbanica and Hoodies. After the acquisition, the holdings of all the Urbanica shareholders will be diluted in equal parts.

Marketing of the Urbanica chain is built around the Bar Refaeli brand. She also fronts the chain’s brand in ads, as she also does with Hoodies and the Caroline Lemke eyeglasses brand.

Urbanica launched its first branch in May 2015 in Rishon Lezion’s Cinema City. Since then it has opened branches in Ashdod, Beersheba, Tel Aviv’s Azrieli Mall and Eilat. Four more outlets are planned for 2017, including Haifa’s Azrieli Mall and Bilu Junction near Rehovot. Urbanica is based on the UK’s Primark Group.