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French cosmetics group consolidates operations in France, leaving Israeli workforce and retail presence in limbo
End of an Era: Sabon Retreats from Israel
In a major strategic shift, French cosmetics conglomerate Yves Rocher has announced the closure of Israeli operations of its soap and skincare subsidiary, Sabon. The move includes the shutdown of its manufacturing plant and global logistics headquarters in Kiryat Gat, affecting 270 employees. This decision follows years of operational complexity caused by dual production centers in both France and Israel, which the company has deemed unsustainable. By centralizing production in France, Yves Rocher aims to reduce duplication and streamline costs.
The company is in advanced negotiations to sell the Kiryat Gat plant, with a non-binding letter of intent already signed. If the deal falls through, the facility will close by June 2026. Meanwhile, Sabon’s logistics center is set to shut down as early as October due to the end of its lease. The gradual closure of its global headquarters will begin in early 2026 and conclude mid-year.
Simultaneously, Sabon plans to divest its 22 Israeli retail stores, seeking buyers who could take over as exclusive distributors in the country. This would effectively end Sabon’s direct retail presence in Israel. While employees in retail may be absorbed by new owners, their fate remains uncertain, hinging entirely on the terms of future acquisitions.
Founded in 1997 by Sigal Kotler-Levy and Avi Piatok in Tel Aviv, Sabon began as a local boutique soap maker before expanding internationally. However, following its partial acquisition by Yves Rocher in 2016 (€120 million) and a full exit by the founders in 2018 (\$40 million), the company has faced challenges. After a U.S. bankruptcy in 2020, Sabon pivoted to online sales and currently operates 180 stores in 14 countries.
In recent years, Sabon’s Israeli footprint has shrunk dramatically—from 43 stores in 2016 to just 22 today—largely due to diminished marketing efforts and growing competition, especially from Laline, a brand owned by the Fox Group. Sabon also faces internal brand conflict, as Yves Rocher’s products are distributed in Israel by the local Castro Group, creating a competitive overlap that may have accelerated Sabon’s retreat.
The National Federation of Labor, which represents Sabon’s Israeli employees, has vowed to safeguard workers’ rights. It has stated it will not tolerate unilateral decisions and is prepared to take legal action if necessary.
What Undercode Say:
Sabon’s exit from Israel is more than a corporate reshuffle—it’s a layered business retreat underscored by strategic misalignment, missed brand potential, and shifting retail dynamics.
Centralization over localization:
Yves
Diluted identity post-acquisition:
After Yves Rocher acquired Sabon, the brand’s unique Israeli DNA—its artisanal spirit and Tel Aviv origins—began to erode. The founders’ early exit and lack of a smooth cultural integration set the stage for identity dilution. The diminishing retail presence, minimal marketing push, and intra-brand competition (with Yves Rocher itself) weakened Sabon’s original appeal.
Market cannibalization:
Yves Rocher’s dual presence through Castro and Sabon created brand confusion. Rather than synergizing the two lines, they were seemingly pitted against each other. Castro’s distribution of Yves Rocher cosmetics occupied mall real estate that could have otherwise reinforced Sabon’s visibility. This internal rivalry undercut the brand’s growth potential.
Impact on workers and national sentiment:
The closure hits hard not just economically but emotionally. For many Israelis, Sabon was a rare local success story on the international stage. Its factory in Kiryat Gat symbolized innovation and entrepreneurship. Layoffs of over 270 people amid this closure evoke not only economic loss but also national disappointment.
The retail reality check:
Sabon’s fall also illustrates a broader retail truth: success in digital does not guarantee success on the ground. While the brand has pivoted to e-commerce, physical presence still matters, especially for sensory products like soaps and cosmetics. With competitors like Laline aggressively expanding, Sabon’s passive strategy in Israel was bound to falter.
What comes next?
The proposed model—selling retail operations to a distributor—could salvage the brand’s presence but will depend entirely on the new owner’s investment and vision. If the buyer is purely interested in short-term gains or brand licensing without deep engagement, Sabon will lose more than just storefronts—it will lose relevance.
🔍 Fact Checker Results
✅ Sabon is indeed closing its Israeli production and logistics operations by mid-2026.
✅ 270 workers will be laid off unless absorbed by a buyer, as confirmed by official statements.
✅ The brand’s local retail presence is halving due to diminishing market performance post-acquisition.
📊 Prediction:
Sabon’s retail brand may survive in Israel under a new distributor, but it will struggle to regain its original identity and customer loyalty. Without founder-driven vision or aggressive brand management, the stores may evolve into generic outlets rather than maintaining Sabon’s artisanal charm. Expect Yves Rocher to double down on its Castro-led distribution model in the region, effectively replacing Sabon as its flagship face in Israel.
References:
Reported By: calcalistechcom_d46a4fcd865dc07bf3ba2e29
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