Israeli Fashion Chains Onot and Jump Seek Debt Restructuring Amid 38 Million Shekel Debt

The Israeli fashion retail chains Onot and Jump have filed an urgent petition for opening economic rehabilitation proceedings and a stay of proceedings due to combined debts totaling 38.2 million shekels. Operating 37 stores nationwide, these well-established brands submitted their request on Thursday to the Tel Aviv District Court. They seek a temporary freeze on creditor actions, appointment of a trustee, and permission to continue operations for 60 days to find a buyer or investor to sustain their business and generate revenue during this period.

The companies attribute their financial distress to significant business and cash flow difficulties caused by both internal and external factors. Notably, their operations were severely impacted by the recent "Iron Swords" war and the "With a Lion" military operation, which disrupted store activity and sales volumes. These events led to eroded profitability, increased cash flow pressure, and impaired their ability to meet financial obligations.

Despite implementing cost-cutting measures such as closing unprofitable branches, reducing staff, and switching to a lower-cost logistics system, the chains have reached insolvency. The petition was filed by attorneys Amit Lederman, Dorit Karni, and Wassim Sibbat from the law firm Amar, Reiter, Jean, Shukhtovich & Co. Additionally, the companies mourn the recent tragic passing of Onot’s founder, Yoav Shama, in February.

The companies hope the court will grant the requested relief to enable continued operation while seeking a strategic investor or buyer to preserve the brands and jobs. This move reflects the broader challenges faced by retail businesses in Israel amid geopolitical tensions and economic pressures.