The retail landscape in which we have operated for the better part of the last five decades has evolved dramatically in recent years.
In addition, the economic cycle has been against us. We have witnessed slowing regional economies, higher costs of doing business in our home base, Singapore, and currency devaluations resulting in a drop in consumer spending. The strong Singapore dollar has also dampened tourist spending and these challenges have been clearly documented in my past messages.
Advances in technology and rapidly changing consumer behaviour have caused online shopping to become an ingrained behaviour. This is happening more and more in Southeast Asia with Singapore leading the way. We have started selling some products online and are working towards developing an omnichannel strategy to drive both online and offline sales. Given the above, for four years now, management has embarked on a rigorous and sweeping restructuring programme which has continued during the year under review. We have aggressively pruned our portfolio of underperforming and non-core brands, closed stores providing unacceptable returns, improved our inventory turn, and streamlined operations across our markets for greater efficiency.
For the financial year ended 30 June 2017 (FY17), Group turnover fell 18% to $207.5 million, largely due to closures and discontinuance of business and decrease in sales to our Indonesian associate. Net loss for FY17 was reduced from $23.0 million to $17.4 million. Gross margins improved by three percentage points to 42% from 39% last year, and operating losses decreased by 43% to $11.4 million. While these financial numbers are still far from what we demand from the business, the clear result is that moving forward, we will have a more productive operation.
Our restructuring programme is nearly completed, the results of which will become evident in the new financial year starting 1 July 2017 (FY18). There are last steps of the restructuring that we are determined to take within FY18, including continuing to drive down our selling, general and administrative costs meaningfully, and rationalising our brand portfolio, both of which will have a favourable impact on our financial performance. Strong brands continue to perform well globally despite disruptive forces of technology or weak macro-economic factors. Innovation has been key to their success. We have identified these brands, some of which have already been launched and are demonstrating promising results, and some of which will be launched in FY18.
The Company remains on the Singapore Exchange watch list where it was placed first in December 2016 for sustaining pre-tax losses for more than three consecutive financial years, and in June 2017 for having a minimum trading price of less than $0.20 or market capitalisation of less than $40 million for more than six months. Management is mindful of the three-year deadline from 5 December 2016 to meet the requirements to maintain its listing and is working hard towards this goal. We plan to secure a transaction that would return the Group to profitability. To that end, we announced on 14 November 2016 that we have entered into a non-binding term sheet with an international third party regarding a potential transaction which may enhance or unlock shareholder value. Discussions are ongoing and the Board continues to explore other strategic options to unlock shareholder value. We will make further announcements as and when there are significant developments.
During the year, we have also made some Board changes as part of the Group’s renewal and succession plans. We appointed Mr Liew Choon Wei as Independent Director and Chairman of the Nominating Committee. Mr Liew has a wealth of experience in business and finance and was previously an Audit Partner at Ernst & Young LLP Singapore. Two long-serving directors – Mr Keith Tay Ah Kee and Ms Wong Ai Fong – stepped down after dedicated service to the Board for many years. We thank them for their invaluable contributions and wish them all the best in their future endeavours.
On 30 June 2017, I relinquished my Executive Chairman position to become Non-Executive Chairman. Having founded the Group and being at the helm for nearly 60 years, the time has come for me to take a more passive role and I am confident the present management team is able to lead the Group out of the current downturn and towards another prosperous era.
Finally, I wish to thank my fellow Board members for their unstinting contributions and wise counsel during the year. To our landlords, bankers, business partners and principals, many thanks for supporting us through thick and thin. And most of all, to all our employees for their hard work, perseverance and patience. Together, we will continue to give our best to secure the interests of all stakeholders who have helped make the F J Benjamin Group a household brand.
F J Benjamin Holdings Ltd.