In a recent interview with Globes, a leading financial magazine in Israel Mr. Isaac Dabah, CEO of Delta Galil, explained his vision for the future and a little about the recent changes and moves within the company.
Where performance is concerned, Dabah’s term at Delta Galil has led to the company multiplying in value many times over, with its market cap reaching record numbers. He is quoted to have once said that he wants to be one of the world’s 10 largest companies in the field, and it seems he has gotten very far with this plan. “In intimate wear, we’re the fourth largest. We have many growth engines, and the main focus is on organic growth. We aim to continue developing relationships with our main customers, meanwhile we’re also concentrating on growth in Asia, especially China” Says Dabah, “We were busy with other things, but now we’re devoting special attention to it. We have partners in the country, and we will soon sign a franchise agreement to sell our products in China.”
Today Delta produces for giants such as Calvin Klein, Nike and Victoria’s Secret to name a few, and holds franchises to produce for top tier brands like Tommy Hilfiger, Lacoste and Columbia. At the new company headquarters in Caesarea people talk with enthusiasm about new cotton that allow the body to stay cool, about special shock absorbing threads integrated in socks of top athletes and about activewear with laser cuts at the knees designed to facilitate movement. All this is evidence that Delta’s products and patents have transformed textile into a high-tech business, not really a surprise considering that the company invests 4% of its turnover in research and development.
In comparison with other markets, Delta Galil’s products are trend-proof; sales are stable. However, the company is constantly pushing forward. Last summer, Delta Galil announced the biggest deal in its history; acquiring activity of premium brands 7 For All Mankind denim and the popular apparel brand Splendid from US clothing and footwear company VF.
This deal represents a new era for Delta Galil, but it also brings with it exposure to the unpredictable dictates of fashion at some risk. Are you happy with this new direction?
“It was an excellent deal. I think we’ve made good decisions up until now, and here we have international brands that will help Delta Galil flourish. Where risk is concerned, we’re very conservative. In the four years preceding this acquisition we bought nothing because the market was very hot, and the prices were very high.”
“It’s true that most of our products are not relying on trend, but in order to grow we needed an acquisition, and so we went into a different category. As for risk, there have been Levis for 200 years. Demand can change but I still expect this acquisition to increase both our profit margin and our sales – we’re already leveraging it. We decided to introduce our brands into stores: for example, we have already inserted yoga clothes to some US stores, and we’ll soon move to other products.”
As a seasoned businessman with a proven track record, Dabah seems to know what he is doing. What made you choose to invest in Delta Galil?
“I was always very proud of what Delta Galil was doing and saw a company with a lot of innovation. I asked my lawyer at the time to organize a meeting with Dov Lautman, and met him in Tel Aviv. We hit it off immediately, and we found a lot in common. At that meeting I asked him if he was selling, and said, ‘Right now, no’. Some time later he calls me and says ‘My partners want to sell and if you want to buy, I’ll let them know’. After that deal I became a director in Delta Galil, with Dov as chairman. Later on he asked me if I wanted to buy his controlling interest in the company. We negotiated, and I bought.”
Dov Lautman founded Delta Galil in 1975 with a single manufacturing plant. The company now has 10,000 workers, markets in over 20 countries and maintains a production network around the world. How does Delta Galil keep fair employment terms in all these places?
“This is one of our biggest challenges and we’re working on it constantly. We make sure our partners and suppliers meet the highest level of compliance with all rules of fair employment. It’s very important to us, just as it is important to our clients and we never pass on responsibility. These are our people, and we are making every effort in that front.”
Why did you start managing the company? It is a different role than stake holding.
“The truth is that I wanted to improve my investment. At the time the company was in a difficult situation. I thought that in the long term, it was an opportunity and I saw the potential. I’m very glad that Dov lived long enough to see the company succeed, because it made him very happy.”
There is no doubt Dabah has a clear vision for his company, and that Delta Galil has in store big ideas and ambitions for the future. Concentrating on innovation and expanding business, it is safe to say that the company will break new records in the future, just as it did until now.