Brimag Digital: How Much of the Story Still Rests on LG, Traklin, and One Major Customer
This follow-up isolates Brimag’s concentration map. LG still accounts for 73% of purchases and 60.6% of revenue, Traklin is both a meaningful customer and a sister-channel platform, and another large customer contributes 10% of sales without a signed agreement. As long as the heaviest supplier relationship still rests mainly on working practice rather than a written umbrella agreement, concentration remains a core part of the thesis.
What This Follow-Up Is Isolating
The main article already set up the broad 2025 picture: better profitability, less clean cash, and a model getting more complex. This follow-up isolates a different layer that matters just as much: the concentration map that Brimag’s economics actually sit on. What looks from the outside like a broad distribution platform is, in practice, built around three very clear nodes: LG on the supplier side, Traklin on the sales-floor side, and another major retail customer that the company does not name at all.
The issue is not only the percentages. For a distributor, concentration is not just a number in the risk section. It determines who anchors inventory, who anchors the sales floor, who absorbs credit, and who can change revenue and stock risk at the same time. That is why the fact that the heaviest relationship in the chain, the one with LG, is not governed by a written umbrella agreement is not legal trivia. It is one of the main places where the quality of the model has to be tested.
There is another concentration layer behind those three nodes. The four brands LG, DeLonghi, Kenwood, and Braun account for about 83% of company revenue and about 91% of company purchases. So Brimag looks wide in catalog and channels, but the economic core is far tighter than that surface view suggests.
What Dependence on LG Really Means
LG is not just another central supplier. It is an axis around which much of the activity is built. In 2025, 73% of group purchases came from LG, and about 60.6% of group revenue came from LG products. The report also describes a 25 year relationship under which the group acts as the sole authorized distributor in Israel of LG home products and, since 2009, also of LG commercial and home air-conditioning systems.
But this is also exactly where the key crack sits. The same section says the group does not have written agreements with LG that govern the full relationship, and that it was not formally appointed by LG as an exclusive distributor across the group’s activity areas. Instead of an umbrella contract, there is a working practice: annual and sometimes two-year sales budgets, purchase orders, open-account terms and at times documentary letters of credit, plus unwritten understandings built over time.
That distinction matters. A working practice can be commercially strong day to day, but it does not provide what a written umbrella agreement provides: a clear exit mechanism, a hard definition of scope, or contractual certainty when stress arrives. So there is no contradiction between a deep commercial bond and a softer legal anchor. Both are true at the same time, and that is the point.
Another detail sharpens the risk. Except for defective products, LG is not required to take inventory back from the group. Sometimes, when certain inventory is hard to sell, LG helps through sales campaigns, advertising support, or price discounts. That is supportive behavior, but it is not hard downside protection. When inventory gets stuck, the economic risk still sits first with Brimag.
The company does not try to over-soften that point. In its own risk table, dependence on LG is classified as a unique group risk with large impact. At the same time, management says it believes it would be difficult for LG to terminate the relationship unilaterally on short notice because replacing Brimag would require another importer with similar financial, operational, and commercial capabilities. That is an important business judgment, but it is explicitly framed as forward-looking information. Put simply: there may be operational logic that makes a fast break difficult, but there is no contractual protection that closes the risk.
Traklin: Not Just a Customer, But an Operating Layer
If LG is the supplier axis, Traklin is the channel axis. The investor presentation shows Traklin as a sister company owned by the controlling shareholder, with about 54 branches, and explicitly presents Brimag’s access to the sales floor through Traklin’s store network as one of Brimag’s strengths. That is already more than a reading of “important customer.” It is a reading of commercial infrastructure.
The numbers support that. Revenue from sales to Traklin and other companies owned by the controlling shareholder reached about NIS 51.4 million in 2025, equal to about 11.9% of group revenue. In the related-party note, 2025 sales to companies owned by the controlling shareholder are shown at NIS 51.356 million, up from NIS 48.472 million in 2024. At the same time, year-end trade receivables from that same side rose to NIS 29.56 million, up from NIS 19.986 million at the end of 2024. In other words, this channel is not just generating revenue. It is also absorbing more working capital.
That matters even more because the relationship sits on top of a dense agreement network that turns Traklin into much more than another point of sale:
| Layer | What was approved | What it means in practice |
|---|---|---|
| Product sales agreement | In August 2024 the sales agreement was extended from September 1, 2024 through September 30, 2027. Pricing is based on cost plus a margin derived from four reference customers, payment terms are net 160 days, and in March 2026 the audit committee said there was no need to change the margin formula; revenue under this agreement during the period was NIS 48.3 million | Traklin is a related-party customer, but not on arbitrary pricing. The relationship is built into Brimag’s pricing logic and into its credit profile |
| Advertising and trade fairs | Joint advertising up to NIS 2.5 million per side in each 12 month period, and participation in trade-fair costs up to NIS 650 thousand per 12 month period | Traklin also functions as a marketing layer, not just as a customer buying goods |
| Sales-floor and tender services | Sales-floor services, promoters, and ancillary services at commissions of up to 12% of selling price, capped at NIS 3 million per 12 month period | Brimag can buy access to the sales floor through a sister company when it needs to push a product or tender |
| Private-label products | From July 2025 a three-year trial period was approved for selling private-label products through Traklin. Pricing gives Brimag a 25% base profitability level, and Brimag is also entitled to half of the upside above a 25% profitability threshold at Traklin | Traklin is also a retail test platform for a new product line, not only an existing channel |
| 2026 operating extensions | From January 2026 a concept store in Eilat was approved at 8% of store sales up to NIS 750 thousand per year, and a call-center agreement starting in June 2026 at NIS 50 thousand per month was also approved | Even after the balance-sheet date, the relationship is deepening into a broader operating layer |
The positive side should also be said clearly. This network reduces the classic risk of “related-party deal with no mechanism.” There is an audit committee, external auditors, and a pricing formula tied to external reference customers. But that is also exactly why the relationship matters so much. It is not a small side arrangement that can be moved easily. It is already woven into pricing, marketing, service, and new-product launches.
The Other Major Customer Is the Less Comfortable Link
The annual report also presents another retail customer, not named, with sales of about NIS 43.2 million in 2025, or about 10% of group revenue. That is large enough to matter to the thesis, but disclosure around it is materially thinner than disclosure around Traklin. The company explicitly says it has no signed agreement with this customer, and that most sales are made from time to time based on the customer’s demand and subject to available inventory.
This may be the least comfortable part of the concentration map. The first major customer, Traklin, is related to the controlling shareholder and therefore wrapped in approval mechanisms and detailed contracts. The second one, external, already represents 10% of turnover without the market getting a name, a signed contract, or committed volume. Anyone trying to assess how diversified Brimag really is has to admit that its second major customer exposure sits exactly where disclosure is weaker.
The point runs deeper than the lack of contract itself. When sales are mainly made on demand and subject to existing inventory, the commercial relationship can weaken faster than inventory can shrink. For a distributor, that is exactly how a sales issue turns quickly into a cash issue.
What Has To Change for This Map To Look Healthier
Brimag’s concentration map is not going to disappear. There is no reason it should disappear entirely, because part of the company’s competitive edge comes from deep relationships with suppliers and with the sales floor. The real question is whether in 2026 this map will look like a managed moat, or like too much dependence on too few nodes.
| Checkpoint | What would calm the read | What would pressure the read |
|---|---|---|
| LG | Clearer anchoring of the relationship, or at least some reduction in relative weight without harming operations | Similar dependence with no contractual anchor and no real broadening of the supplier base |
| Traklin | Better convergence between sales growth and the receivables balance, plus proof that the newer agreements widen the channel rather than just deepen dependence | Continued swelling of receivables or more service layers without better turnover quality |
| The other major customer | A signed contract, or at least stronger disclosure on the nature of the relationship | Ongoing 10% revenue exposure with no name and no contract |
| New product lines | Proof that private-label products and the concept-store route expand beyond Traklin rather than stay trapped inside the related channel | A situation where the new lines remain mostly inside the same controlled outlet |
What matters near term is not whether Brimag is “concentrated” or “not concentrated.” That is too weak a description. The real question is whether the company is turning concentration into a managed asset, or whether concentration is starting to manage the company through inventory, credit, and reliance on a few relationships that are not equally hard-anchored.
Conclusion
Brimag does not rest on anonymous concentration. It rests on named concentration. LG holds a very large share of purchases and revenue. Traklin holds a meaningful share of sales, direct access to the sales floor, and a layer of marketing, service, and trial agreements. The other major customer adds another 10% of turnover, but without a name and without a contract. That can produce a real competitive edge, but it also creates a setup in which one weak node can hit several layers at once.
That is the core of the story. For Brimag, concentration is not just a question of what percentage comes from a supplier or a customer. It is a question of anchor quality. As long as the relationship with LG rests mainly on working practice rather than a written umbrella agreement, as long as Traklin remains both customer and operating layer, and as long as the other large customer stays unnamed and unsigned, the model remains operationally strong but less resilient than the 2025 numbers alone might suggest.
Disclosure: Deep TASE analyses are general informational, research, and commentary content only. They do not constitute investment advice, investment marketing, a recommendation, or an offer to buy, sell, or hold any security, and are not tailored to any reader's personal circumstances.
The author, site owner, or related parties may hold, buy, sell, or otherwise trade securities or financial instruments related to the companies discussed, before or after publication, without prior notice and without any obligation to update the analysis. Publication of an analysis should not be read as a statement that any position does or does not exist.
The analysis may contain errors, omissions, or information that changes after publication. Readers should review official filings and primary sources before making decisions.