Castro Hoodies Group has announced a significant development as it enters into a 20-year franchise agreement to introduce the renowned French brand Yves Rocher into the United States market. Under this agreement, Castro Group, a prominent fashion and lifestyle retailer in Israel, will hold an 80.2% stake in the newly established subsidiary called Radixis. Radixis will be dedicated to the launch and promotion of Yves Rocher products in the U.S.
It is reported that Castro Hoodies Group, operating in Israel since 1950, boasts over 350 stores across the country and represents seven brands. With a turnover of $0.5 billion and a workforce of over 5,000 employees, the group stands as a prominent player in the Israeli retail industry.
Additionally, Ron Rotter, an experienced executive, is appointed as the CEO of Yves Rocher USA and will receive 9.9% of ordinary shares subject to a reverse vesting mechanism over three years. Rotter expressed pride in this milestone for Castro-Hoodies Group, highlighting Yves Rocher’s position as a global leader in botanic cosmetics and emphasizing the brand’s successful launch in Israel a decade ago.
The initial investment in Radixis amounts to approximately $7 million, with Castro contributing $6 million. There is an option to increase this investment pending board approval. The capital infusion will support the establishment of an exclusive online website, the opening of retail stores throughout the United States, and the creation of the Radixis R&D Center in Tel Aviv.
The Radixis R&D Center will leverage Israeli expertise in AI, Big Data, and machine learning to tailor Yves Rocher’s offerings to the diverse needs of American consumers. Assaf Hefetz and Rami Lechter, Israeli entrepreneurs, will serve on the advisory committee of the R&D Center, providing valuable insights into technology and digital operations.
Rotter further explained that Castro Group consistently seeks new business opportunities to achieve its objectives. The decision to launch Yves Rocher in the U.S. market is based on their successful operational model of efficient points of sale and robust digital and e-commerce operations. With the U.S. beauty market estimated at $100 billion, Castro Group aims to maximize the commercial potential of this significant target market.
