Singapore's retail scene is down in the dumps, relatively speaking. Empty shopfronts are not a rare sight in mall corridors in town, while some big-spending tourists have stayed away.
Home-grown names, such as Singapore-listed fashion and lifestyle group F J Benjamin Holdings - founded by Mr Frank Benjamin in 1959, and named in 2002 as Singapore's top retailer for brand value creation by KPMG and Oxford University - have been dealt several blows in recent years.
Although visitor numbers rose 14 per cent from January to March this year from the same period last year, tourist receipts expanded by a paltry 2 per cent to $5.4 billion, recently released figures from Singapore Tourism Board showed.
Urban Redevelopment Authority data also showed that islandwide vacancy rates in malls in the three months to June 30 rose to 7.8 per cent, from 7.3 per cent in the previous quarter.
Vacancies in the Orchard planning area rose to 9.2 per cent in the second quarter, after hitting a five-year high of 8.8 per cent in the first quarter.
One of F J Benjamin's most internationally acclaimed labels, Raoul, worn by the Duchess of Cambridge during her visit to Singapore in 2012, silently disappeared from malls here when the firm had to close its last store at Paragon mall in February.
Despite this backdrop, chief executive Nash Benjamin, 66 - the younger brother of Frank, 82, and who succeeded him in 2006 - said in an exclusive interview that it was not all bad news, and remained quite sanguine. He was speaking to The Straits Times in Jakarta ahead of a launch event for Casio, for which F J Benjamin was recently appointed a retailer in Indonesia.
The firm has had a rough patch. In 2014, it reported its first loss since the 2008 financial crisis, and later found itself in the red for the third straight quarter by September last year.
The exception was a net profit for the three months to Dec 31 in 2014.
Somehow, Mr Benjamin has put it all behind him.
Dressed in casual attire and leaning comfortably against the sofa in the lounge of the Grand Hyatt in Jakarta, he comes prepared with a piece of paper filled with handwritten notes, an aide-memoire on what F J Benjamin has been busy with over the last three years, since it quietly embarked on restructuring.
DOING MORE WITH LESS
Mr Benjamin said: "We've talked about the doom and gloom of retail sales; everyone is complaining, and you know what? It is true. We've had three very difficult years of restructuring because there was major disruption in the Asian retail scene.
"We also had stores and some brands which were not performing too well, and we had to do a lot of restructuring and reorganising."
He noted that this involved closing stores, and discontinuing certain businesses such as the distribution of watches in North Asia, including mainland China and Hong Kong in March this year.
Despite tough market conditions, F J Benjamin has continued to look for and introduce new brands, improved its productivity, and "did more with less - in other words, more business with less inventory, fewer people and less cost".
The results are clear as full-year operating expenses fell 21 per cent to $118.9 million, debt fell to $31.7 million from $46.1 million last year, and it had positive cash flow of $19.6 million.
"When everyone's complaining about how bad business is, apart from the restructuring costs, our business didn't really drop. In fact, our business in Malaysia went up 2 per cent - excluding currency translation losses - and (there was) a drop of 1 per cent in Singapore," he added.
"When you read what's in the press, and it's not that they are making it up - there are a lot of empty stores in Singapore - it would seem like business has dropped 15, 20 per cent. For some operators, it probably did, but we were not too affected."
Even though F J Benjamin's share price has fallen from a high of about 36 cents a share in 2012 to hover around five cents in recent days, the firm is more focused on the good than the bad.
Asked about possible delisting plans, Mr Benjamin said: "It's not something we can talk about. There are always pros and cons, so this is something we will always review. There're still merits to being a listed company in Singapore, like raising capital, which we can't do because our share price is so depressed right now. So we'll wait and see. Things will turn around and I'm very positive of it."
The Benjamins continue to be a tightknit group, as the family works together to overcome the tough times.
Although Douglas - the group chief operating officer, and patriarch Frank's older son - could not make it to the Casio event in Jakarta, Frank and younger son Sam, director of fashion retailer FJ Benjamin's luxury division, were present alongside the chief executive.
As they made their way through Jakarta's established and newer malls, before the Casio event and also the day after, they never passed up an opportunity to check their stores of brands such as Guess, Givenchy and Celine.
THE MH370 EFFECT
The first blow to F J Benjamin that triggered the restructuring was President Xi Jinping's crackdown on corruption in China, which poured cold water on demand for luxury goods.
"There was an effect because Chinese tourists travel and they were big spenders. Our tourism numbers have not dropped, but the quality of spending has come down."
The other blows to the firm and the entire retail industry here came from the slowing economy, which worsened in South-east Asia after Malaysia Airlines Flight MH370 disappeared on March 8, 2014.
F J Benjamin's key markets - Singapore, Malaysia and Indonesia, which are frequently packaged together as holidays for Chinese tourists - were badly hit as tourists shunned the region. However, there is always a silver lining.
"With a lot of stores closing and not renewing leases, we are beginning to see rentals come down. Some of our landlords have been reasonable, some have not. Some have agreed to reduce certain rents even though we still have tenancy, some have not."
But the commercial terms for F J Benjamin's new leases are much better these days, which the head honcho said is a game changer. "At the end of the day, the amount of rent you pay must be a function of the turnover. If your business is very strong, you can afford to pay big rentals."
Looking at the Orchard Road belt of malls with their different levels of popularity, Mr Benjamin said that in top-end malls in prime locations, rentals are unlikely to drop.
However, in the other malls, "even though some stores may appear to be operating, they are really pop-up stores which are leased for five to six months without any decoration. There are a lot in Suntec City".
Home-grown online retailers such as Reebonz and Megafash are among those which have pop-up stores there, for instance, and it is a growing trend, noted Mr Benjamin.
"There will always be a retail business. It will just take a different shape and form, depending on consumer demand."
And in the clothing, leather goods and accessory business for the fashion apparel industry, he said the online business is under 10 per cent, while the majority of sales are still made at brick-and-mortar stores.
He declared: "E-commerce and brick and mortar stores complement the omni-channel model. When you have that, you may sell certain things online and then have them picked up at your store. (Customers) might buy other things and you can upsell as well, and vice versa. It's a more compelling and sustainable model for the long term."
It is in the process of developing its own omni-channel strategy and model. "If you go to Guess.com, you should go to the United States site. But if you click in from an IP address in Singapore and Indonesia, you'll be directed to our local site," he said.
WHAT IS NEW FOR FJ
"In a difficult market situation, we get offered many brands. It's simple to take on many brands, but in this period, we've got to take on only brands we're very sure of, which can be relevant and can work, which we did for Marc Jacobs," Mr Benjamin said.
It recently announced that it had bagged the exclusive distribution rights to bring in the Marc Jacobs brand, under French luxury group LVMH Moet Hennessy Louis Vuitton, in Singapore, Malaysia and Indonesia. For instance, it is in Paragon in Orchard Road, and a store will open in the Suria KLCC shopping mall in December this year.
The firm also added a baby and travel department this year - with plans to expand the brands it distributes - and distributes French brand Babyzen, known for its easily collapsible buggies that can be taken onto planes instead of having to check them in.
It also introduced a brand of paper products called NooTrees, which F J Benjamin developed with a start-up it invested in. "It's some form of diversification," said Mr Benjamin of the exciting move for the firm.
The products, including tissues and wet wipes, are 100 per cent made from bamboo and biodegradable. The brand is in 250 stores here, including supermarkets and petrol stations. "But the interesting part of the business is testing the US market. Over the last few months, Nootrees has been in 200 stores there and is beginning to sell."
The firm opened British brand Superdry in Suntec City, by the escalator near H&M last month, and will open a flagship store in March next year. "I cannot tell you right now, but it's in a great location," said Mr Benjamin.
F J Benjamin has also set its sights on connecting with the millennials, who will have spending power in the years to come. "We're looking for certain brands and businesses, not just fashion, that cater to them, in the way they shop, travel and eat. It could even be interesting food and beverage franchises."
This is a company that is not shy about reinventing, having opened Singapore's first single-brand store, Lanvin, in the Grand Hyatt hotel in 1975.
Mr Benjamin added: "The whole global situation is still volatile and unpredictable, but I feel as a group, we are in a much better place than a few years ago because we've done what we had to do, and it's now about rebuilding and growing."
This article was first published on October 24, 2016.
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