Azrieli Group Ltd. (TASE: AZRG) will give its customers gift cards in an attempt to lure them back into its shopping malls, sources inform "Globes." The measure, the cost of which is thought to amount to millions of shekels, is the result of buyers staying away from shopping malls because of terrorist attacks. Such a measure has not previously been taken by the shopping malls.
It appears that each gift card will be loaded with NIS 50, and will be given unconditionally. Alternatively, the group will award purchase coupons for the group's shopping malls through the Internet. The card or coupon can be used only in businesses operating in Azrieli malls, and as far as is known, will not be contingent on the size of the purchase.
The details of the measure, which will accompany a campaign, are being completed by the group's management. The group will also have to find a solution that will prevent tens of thousands of Israelis from stuffing their pockets with gift cards.
The decision to distribute a gift card comes after proceeds of the stories in the shopping malls and shopping centers have plummeted since the beginning of the current wave of terrorist attacks. The market fears the collapse of businesses experiencing cash flow problems. The fall in proceeds at malls is occurring everywhere in Israel, and several of the major shopping malls have suffered a drop of up to 60% in proceeds.
Store chains are severely criticizing the management of the malls and shopping centers, which continue to charge high rents, while business owners in the malls are taking the entire loss themselves.
Melisron Ltd. (TASE: MLSR) subsidiary Ofer Malls yesterday launched a campaign designed to encourage buyers to return to the malls. The campaign offers sales days on which a discount of up to 50% on purchases will be offered. A source close to the Azrieli Group told "Globes," "Melisron launched a campaign offering a discount, but gave nothing of its own. Danna Azrieli (Azrieli Group chairperson and controlling shareholder, I.H.) wants to give, and wants this money to go to the merchants."
The source added that the greatest distress of the chains is the absence of shoppers. If the campaign is truly a major one, it is likely to give Azrieli malls an advantage in attracting an audience over other malls in Israel - an important advantage at a time when most of the shoppers are staying home.
On the other hand, it is argued that the Azrieli Group's planned measure absolves it of the need to grant discounts in rent to businesses in the malls - a measure that if adopted on a large scale, is liable to affect the value of every single shopping mall, which is determined by its rent.
Published by Globes [online], Israel business news - www.globes-online.com - on October 25, 2015
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