SINGAPORE - F J Benjamin Holdings is closing down some of its stores here, having posted its first quarterly loss since the global financial crisis.
The retailer said net loss for the third quarter ended March 31 stood at $4.87 million, reversing from a net profit of $417,000 booked in the same period a year ago. This translated to a loss of 0.86 cents per share for the quarter, compared to earnings of 0.07 cents per share.
Turnover fell 2 per cent to $90.3 million, dragged by poorer performance in Singapore. Gross margins also dropped significantly from 44 per cent in the previous corresponding period to 39 per cent in the third quarter.
The company said in its financial statement: "Singapore, a key market, was particularly hard hit by aggressive industry-wide discounting, escalating rentals and manpower shortages."
Retail sales for February also suffered as Chinese New Year in late January this year was relatively close to the year-end festive period. This meant it was hard to sustain holiday spending, the retailer said.
F J Benjamin could not keep a cap on costs. Staff costs were up 11 per cent to $14.5 million; rental gained 4 per cent to $14.5 million. Both are the highest contributors to expenses.
Cost-to-revenue ratio stood at 48.2 per cent for the quarter, compared to 44.9 per cent in the same period a year ago.
The retailer, which counts Tom Ford, Loewe, Swarovski, Bell & Ross and Gap among the brands it retails and distributes here, expects sustainable growth for its businesses in Indonesia and Malaysia. In particular, sales in Indonesia were up 9 per cent, and gross margin held steady due to currency devaluation.
"The group expects the outlook for its businesses in Singapore and North Asia to remain challenging. In Singapore, it is taking steps to close under-performing stores."
Shares of F J Benjamin closed unchanged at 21 cents yesterday.
This article was published on May 10 in The Business Times.
Get The Business Times for more stories.