F J Benjamin bounces back, sees online growth in SG and MY

Fashion and lifestyle retailer F J Benjamin has reported the group’s attributable net profit of SG$3.0 million for the full year ended 30 June 2022 (FY22), reversing a net loss of SG$10.9 million for the previous full year ended 30 June 2021 (FY21) as governments eased social distancing restrictions, borders reopened, and people returned to the malls.

The improved performance came mainly in the second half of FY22 with attributable net profit of SG$4.3 million against an attributable net loss of SG$7.2 million in 2HFY21. The group recorded share of profit from its Indonesian associate of SG$1.9 million in FY22 against a share of loss of SG$2.4 million in FY21. The second half of FY22, from January to June 2022, saw writebacks totalling SG$1.5 million for impairments and reversed allowances for expected credit losses on receivables from an Indonesian associate and related party.

For the whole of FY22, the group’s revenue rose 21% to SG$80.9 million with sales in Singapore (excluding exports to Indonesia) and Malaysia gaining 6% and 28% respectively. Sales at F J Benjamin’s Indonesia associate grew 16% in FY22. The revenue growth came in the second half of FY22 when sales momentum picked up strongly following a sluggish first quarter when many of the group’s stores were closed and business was interrupted due to intermittent COVID-19 disruptions.

The company's online business, which now includes 14 brands, posted encouraging results since the group ramped up marketing activities just before the COVID-19 lockdown in 2020. For FY22, turnover from online channels accounted for 6% of total sales in Singapore and 3% in Malaysia. The Group, however, noted a decline in online sales after safe management measures were relaxed and customers returned to brick-and-mortar stores. Gross profit margin eased from 50.5% in FY21 to 49.4% in FY22 as Malaysia took the opportunity to clear stocks to satisfy pent-up demand.

During the year, management reviewed the group’s regional retail footprint and closed 13% or 21 stores that underperformed on acceptable rental-to-revenue ratios. The group opened seven new stores, bringing its total network to 144 stores in Singapore, Malaysia and Indonesia.

Group CEO, Nash Benjamin said: "We are glad to finally see the economies in our key markets recovering and customers returning to the malls. Although our revenue is not fully back to pre-COVID-19 levels, especially in Singapore but with tourist arrivals growing, we are cautiously optimistic that the strong momentum seen in the second half of FY22 can be maintained barring any unforeseen circumstances. We are of course aware that there are rising inflationary and geopolitical risks but these are risks that management will need to manage and mitigate."

Benjamin added that it will continue to optimise its inventory and manage costs while it develops new business models to diversify its customer base. The group’s operating expenses fell two percent to SG$39.1 million partly due to lower depreciation charge of furniture, fixtures and equipment and lower depreciation of right-of-use assets resulting from expired leases. The decrease was partially offset by higher staff costs, which went up by SG$758,000 in FY22, as the group restored salaries to pre-COVID-19 levels and paid higher commissions in line with expanded sales.

Rental payments rose by SG$714,000, the increase as a result of the need to expense leases due to expire within a year. Meanwhile, the group strengthened its balance sheet in FY22. Net borrowings totalled SG$4 million as at 30 June 2022, as compared to SG$10.6 million as at 30 June 2021. Gearing stood at 10% as at 30 June 2022, against 32% as at 30 June 2021.

During the year, FJB raised net proceeds of $2.9 million through a placement of 120 million new shares at SG$0.025 a piece to Western Properties, a member of Far East Organization, following approval from shareholders of FJB at an Extraordinary General Meeting held on 28 January 2022.

In June this year, F J Benjamin brought in American footwear and accessories brand Cole Haan to the Singapore and Malaysia. Under the distribution agreement, the company will open several Cole Haan retail and outlet stores in the two markets. Additionally, an eCommerce business for Cole Haan will be launched in July. Among the list of brands F J Benjamin counts Fauré Le Page, La Senza, Rebecca Minkoff, Pretty Ballerinas, Marc Jacobs, and Guess as some of the renowned brands within its portfolio. It also picked Creme Digital for digital duties earlier this year.

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